Finance
In Michigan, an 'interest rate buydown' involves:
AThe lender reducing the rate as a marketing promotion
BThe buyer (or seller) paying upfront discount points to permanently or temporarily lower the interest rate on the mortgage✓ Correct
CA government subsidy that reduces all mortgage rates
DA penalty for choosing a shorter loan term
Explanation
A buydown involves paying additional upfront points (cost) to obtain a lower interest rate. A permanent buydown reduces the rate for the life of the loan; a temporary buydown (like a 2-1 buydown) reduces the rate for the first years only.
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