The National Directory of Certified Public Accountants

Ask A CPA - Mortgages & Loans

What Is A Mortgage Buy Down Option ?

The buydown option is a process of trading money for a lower mortgage interest rate. The borrower "buys down" the interest rate on a mortgage by paying additional discount points up front. It is also a mortgage in which an initial, lump-sum payment is made to temporarily reduce a borrower's monthly payments during the first few years of a mortgage.

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