A type of financing made available by a builder or seller to a potential new-home buyer at well below market interest rates, often only for a short period, is termed a:
A) conventional mortgage.
B) convertible adjustable-rate mortgage (ARM).
C) buydown.
D) two-step adjustable-rate mortgage (ARM).
E) growing-equity mortgage.

Question

Quizplus · Accepted Answer

A buydown is when the builder or seller pays an amount upfront to reduce the interest rate for the buyer for a certain period of time. This is often done to incentivize buyers to purchase new homes in a slow market.

A Type of Financing Made Available by a Builder or Seller