Finance
A 'buydown' mortgage involves:
AA. Purchasing foreclosed properties at a discount
BB. Paying discount points upfront to reduce the interest rate on a mortgage✓ Correct
CC. Buying down the principal balance each year
DD. Refinancing after a rate decrease
Explanation
A buydown (or rate buydown) involves paying discount points to the lender at closing to reduce the mortgage interest rate, either permanently or for an initial period. Sellers sometimes offer buydowns as incentives to buyers.
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