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      Managing a 2/1 Buydown in QuickQual

      This guide provides step-by-step instructions on managing a 2/1 buydown in QuickQual. Follow these steps to ensure the scenarios are set up correctly, borrowers are qualified accurately, and letters are generated appropriately.

      Step 1: Set Up Scenarios

      1. Create a Scenario for Each Year:

        • Set up a separate scenario for each year the interest rate adjusts in the 2/1 buydown. Input the corresponding rate in the Qualification Rate field of each scenario:

          • Year 1: Fully discounted rate.

          • Year 2: Adjusted rate for the second year.

          • Year 3 and Beyond: Fully amortized rate (e.g., 6.75% for years 3 through 30).

      2. Be sure to label the scenario tabs:

        • Remember name the scenario tabs to reflect the specific year:

          • Example: "Buydown Year 1," "Buydown Year 2," and "Fully Adjusted Rate."

        • These labels will display on the calculator, helping the borrower and real estate agent identify the scenario they’re viewing.


      Step 2: Set Borrower Qualification Limits

      1. Adjust Limits for Years 1 and 2:

        • To prevent borrowers and agents from generating letters based on the discounted rates:

          • Set artificially low limits for PITI (e.g., $100).

          • Set available cash to $100.

      2. Set Realistic Limits for Year 3:

        • Enter the borrower’s true qualification limits for the fully amortized rate (Year 3 scenario):

          • Determine maximum PITI based on the borrower’s financials.

          • Set available cash based on provided documentation.

      Step 3: Add Notes to the Fully Amortized Scenario

      • Include a note in the Year 3 scenario to reference the 2/1 buydown or any qualifying information.

      • Notes will appear on any letters generated from this scenario, providing additional context.

      Step 4: Test the Calculator

      1. Review Year 1:

        • Ensure the interest rate and payment information are accurate.

        • Confirm that no letters can be generated due to the low limits.

      2. Review Year 2:

        • Verify the updated interest rate and payment information.

        • Confirm that no letters can be generated for this scenario either.

      3. Review Year 3:

        • Check that the fully amortized rate and payment information are accurate.

        • Ensure that letters can be generated from this scenario.

        • Verify that any added notes appear on the generated letter.

      4. Adjust Purchase Prices as Needed:

        • Use the calculator to test how updates to purchase prices affect Year 1, Year 2, and Year 3 payments.


      By following this guide, you can effectively manage 2/1 buydowns in QuickQual, ensuring accuracy and compliance while providing a clear understanding for borrowers and agents. Be sure to write into our support team here at LenderLogix with any questions!