Finance
A buydown is a financing technique where:
AThe borrower buys down the principal with extra payments
BPoints are paid upfront to reduce the interest rate, lowering monthly payments✓ Correct
CThe buyer pays below the appraised value
DThe seller buys the property back at a lower price
Explanation
A buydown reduces the mortgage interest rate by paying discount points upfront. A temporary buydown (e.g., 2-1 buydown) reduces the rate for the first few years; a permanent buydown reduces it for the loan's life.
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