Finance
A buy-down in Indiana mortgage financing occurs when:
AThe buyer buys a property at below market value
BThe seller (or buyer) pays points at closing to reduce the interest rate for the borrower for a period or the life of the loan✓ Correct
CThe lender reduces the loan balance
DThe buyer negotiates a reduced commission
Explanation
A mortgage buy-down is when points are paid upfront to reduce the interest rate. A temporary buy-down (like a 2-1 buy-down) reduces the rate for the first years; a permanent buy-down reduces the rate for the loan's life.
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