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. The typical buydown is 3% of the interest rate amount for the first year, 2% for the second year, and 1% for the third year (also referred to as a 3-2-1 buydown). Bloomberg Financial Dictionary

Financial and business terms. 2012.

Look at other dictionaries:

  • 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

  • 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

  • Mortgage loan — Mortgage redirects here. For other uses, see Mortgage (disambiguation). Finance Financial markets …   Wikipedia

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