A buydown is a
mortgagefinancing technique where the buyer attempts to obtain a lower interest ratefor at least the first few years of the mortgage. [ [http://dictionary.reference.com/browse/buydown "Definition of buydown"] , Dictionary] The seller of the propertyusually provides payments to the mortgage lending institution, which, in turn, lowers the buyer's monthly interest rate and therefore monthly payment. This is typically done for a period of about one to five years.In a seller's market the seller might raise the purchase price to compensate for the costs of the buydown but in most markets it would not be to their advantage to use a buydown as an enticement if they are going to offset the benefit by raising the price. [ [http://money.cnn.com/2006/11/13/real_estate/the_buy_down/index.htm?postversion=2006111316 "Homes: Slow-market savings - the 'buy-down'"] , CNN Money] In most cases, the buydown does not even involve the seller. It is an arrangement between the lender and the buyer.
You may also use the buydown option on a refinance.
Wikimedia Foundation. 2010.
Look at other dictionaries:
Buydown — закладная, ежемесячная плата по которой состоит из основной суммы и процентов. При этом в течение начального периода часть выплат осуществляется третьей стороной, с тем чтобы снизить ежемесячные выплаты заемщика. См. также: Закладные Финансовый… … Финансовый словарь
Buydown — A mortgage financing technique with which the buyer attempts to obtain a lower interest rate for at least the first few years of the mortgage, but possibly its entire life. The builder or seller or the property usually provides payments to the… … Investment dictionary
buydown — noun a) An accelerated repayment of the principal of a loan. b) A payment by a third party to a lender to reduce some of all of the payments otherwise required, especially in first few years of the loan, thereby enhancing the apparent quality of… … Wiktionary
buydown — A lump sum payment made to a creditor by a borrower or a third party to reduce the amount of some or all of the borrower s periodic payments to repay the indebtedness. American Banker Glossary 1) A lump sum payment made to the creditor by the… … Financial and business terms
buydown — / baɪdaυn/ noun US the action of paying extra money to a mortgage in order to get a better rate in the future … Dictionary of banking and finance
buydown — Fin the payment of principal amounts that reduce the monthly payments due on a mortgage … The ultimate business dictionary
3-2-1 Buydown — A type of mortgage with a series of three initial temporary start interest rates that increase in a stair step fashion until a permanent interest rate is reached. Lenders will charge for the temporary interest rate reductions. A 3 2 1 buydown is… … Investment dictionary
2-1 Buydown — A type of mortgage with a set of two initial temporary start interest rates that increase in stair step fashion until a permanent interest rate is reached. The initial interest rate reductions are either paid for by the borrower in order to help… … Investment dictionary
builder buydown loan — A mortgage loan on newly developed property that the builder subsidizes during the early years of the development. The builder uses cash to buydown the mortgage rate to a lower level than the prevailing market loan rate for some period of time.… … Financial and business terms
Builder buydown loan — A mortgage loan on newly developed property that the builder subsidizes during the early years of the development. The builder uses cash to buy down the mortgage rate to a lower level than the prevailing market loan rate for some period of time.… … Financial and business terms