buy-down

American  

[bahy-doun] / ˈbaɪˌdaʊn /

noun

1. a subsidy for a long-term mortgage offered by a third party, as a builder or developer, to lower interest rates for a buyer in the early years of the loan.

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Example Sentences

The dollar amount required to fund the buy-down account is a calculated amount needed to supplement the buyer’s discounted payment over the two-year period.

From Washington Post

Cox: The escrow or buy-down account can be funded by the seller, the buyer, the lender or a third party, such as a Realtor.

From Washington Post

It’s important to note that under the federal Ability to Repay Rule, most lenders are required to make a reasonable and good faith determination that the borrower has the ability to repay the loan using the borrower’s monthly payment without considering the temporary buy-down.

From Washington Post

Idziak: For borrowers who may not plan to be in the home more than a few years — or who expect rates to go down and to refinance in the near future — using a seller concession to purchase a temporary buy-down can result in greater savings to the borrower compared to using funds to make a larger down payment or to buy points to permanently bring down the interest rate.

From Washington Post

For a 2-1 buy-down scenario in which the purchase price is $600,000 with 20 percent down and $10,000 is put toward the buy-down, the buyer’s payment would be reduced by $550 a month during the first year and $285 a month the second year.

From Washington Post