Rate Buy Down -

: The borrower (or sometimes the seller) pays "points" to the lender at closing.

: Funds are held in an escrow account and used to subsidize monthly payments. These are almost always paid for by the seller or builder as an incentive. Common Structures : rate buy down

: Each point typically costs 1% of the total loan amount . : The borrower (or sometimes the seller) pays

This option reduces the interest rate for the entire duration of the loan. Common Structures : : Each point typically costs

A mortgage rate buydown is a financing technique where an upfront fee is paid at closing to secure a lower interest rate, either temporarily for the first few years or permanently for the life of the loan.

: Rate is 2% lower in Year 1 and 1% lower in Year 2. 1-0 Buydown : Rate is 1% lower for the first year only.