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MORTGAGE RATE BUYDOWN

TheLaw.com Law Dictionary & Black's Law Dictionary 2nd Ed.

A subsidy provided that lowers the interest rate of a mortgage for a home. For example, a developer may wish to provide incentive for home buyers and agree to pay a percentage of the mortgage for the first few years. If a home buyer has cash available and wishes to pay a lower interest rate, the home buyer can buy down a loan and pay a subsidy on the interest rate.

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