Finance
A Maine homebuyer with excellent credit applies for a conventional loan. The lender offers a 'buydown' option. A buydown means:
AThe purchase price is reduced
BPaying points upfront to reduce the mortgage interest rate✓ Correct
CThe seller contributes to closing costs
DThe lender lowers the appraisal fee
Explanation
A buydown (buying down the rate) means paying discount points at closing to obtain a lower interest rate on the mortgage. Each point typically reduces the rate by about 0.25%, lowering monthly payments.
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