Local Mortgage Information for Your Area
What is a Buydown Mortgage?
A buydown
mortgage is an initial lump-sum payment-paid in terms of discount
points-that allows the
lender to reduce the
interest rate on a mortgage loan.
There are two types of buydown mortgages:
- temporary buydown: the payment reduces monthly payments during the first few years of a mortgage
- permanent buydown: the payment reduces the interest rate for the entire life (term) of a mortgage
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