The buy-down mortgage or financing technique helps borrowers get lower rates of interest through the payment of the discount points at the time of closing. Discount points or mortgage points indicate the one-time charges which are payments made upfront. The rate of interest rate is comparatively lower for the tenure of the loan.
The buy-down mortgage or financing technique is something which enables borrowers to get reduced interest rates for the initial loan/mortgage years and possibly in the entire loan lifecycle/lifetime. There are 3-2-1 and 2-1 buydown structures or systems followed in this case. A buydown enables home buyers to save on the interest costs throughout a loan lifecycle or lifetime. This may involve the purchase of discount points against loans, requiring upfront payments or charges.
Buydown mortgages are a part of the real estate and property sector. They help people get lower interest rates, along with other favorable terms and conditions. Home buyers could also venture into an ARM (adjustable rate mortgage) as well. The tenure and other terms of a buydown mortgage may also be structured in several ways and through diverse methods for mortgages/loans.
