Finance
In Montana, a 'buy-down' mortgage program (where the seller or developer pays points to reduce the buyer's interest rate) is structured so that:
AThe buyer's interest rate increases over time
BThe buyer pays a lower interest rate for an initial period or for the life of the loan, with the seller funding the cost difference through upfront payment to the lender✓ Correct
CThe buyer receives the buy-down funds as cash at closing
DThe government subsidizes the buy-down for all Montana buyers
Explanation
A buy-down has the seller or developer pay points to the lender to reduce the buyer's interest rate. A 2-1 buy-down reduces the rate by 2% in year 1 and 1% in year 2, then reverts to the note rate. A permanent buy-down reduces the rate for the life of the loan.
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