Finance
A 'buydown' mortgage in Pennsylvania typically means:
AThe buyer buys down the purchase price through negotiation
BThe seller or builder pays upfront to temporarily or permanently reduce the buyer's interest rate✓ Correct
CThe lender buys down the principal balance using escrow funds
DThe buyer pays additional principal each month to reduce the rate
Explanation
A buydown involves the seller, builder, or lender paying a lump sum at closing to reduce the borrower's interest rate — either temporarily (2-1 buydown: lower rate in years 1 and 2) or permanently. Builders in new construction markets like those around Philadelphia and Pittsburgh often offer buydowns as incentives.
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