buy down

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A prepayment on a loan, especially a mortgage, that reduces monthly payments thereafter. A buydown may temporarily reduce payments, for example, by reducing the loan's interest rate for a certain period. On the other hand, a permanent buydown reduces the interest rate by a lesser amount for the life of the loan. A buydown is often made by a third party, but this is not always the case.

buy down

To reduce the interest on a mortgage loan by paying discount points in order to buy down the rate. For residential loans, it rarely makes sense for borrowers to buy down their rate. In order to evaluate,ask for the amount of the monthly principal and interest payments with and without the reduced rate.Subtract the lower number from the larger number.This is the amount of your monthly savings. Divide your monthly savings into the price for the buy down. This provides the number of months you must pay on the mortgage before you will have saved enough money to pay for the discount points. Finally, ask yourself,“Do I realistically think I will own this property for that length of time?”If not,then do not pay the points.

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UO students on campus on a sunny Friday afternoon weren't too impressed by the tuition buy down - which reduces the $542 increase they were expecting next year by $90, to $452.
A brief statement issued by the company said: "Merrion Property Group has agreed to buy Down Royal as part of our property portfolio and we don't envisage any changes to the golf club or racecourse.
The city will also buy down interest rates on housing rehabilitation loans for homes already owned by city employees or employees buying their primary residence in the designated area.
Interest rate buy downs had not been rolled out by many companies in our August survey, but the buy down is a natural for prospective buyers who prefer fixed-rate loans (over ARMs) but flinch at the going rates on these loans.
NACA helped me write my contract, which I presented to the seller stipulating that he buy down my points," Webb recalls.
For example: An employee with three small children might opt to buy additional coverage and pay the difference between his employer's fixed contribution and the upgraded package, while a young, healthy, single employee might choose to buy down and roll her money into the company cafeteria plan or pocket the taxable dollars.
This type of program allows the risk manager to buy down or purchase insurance for the self-insured retention layer that most contributes to the aggregate volatility.
Every dollar checked off would buy down a government bond or other form of debt.
The NSR royalty is subject to a buy down provision providing for the reduction of the NSR royalty to 2.