A buyer purchases a home for which the seller pledges to fund a 2-1 buydown. The buyer’s note rate results in a payment of $1,200. If the 2-1 buydown would have the buyer remitting a P&I payment of $1,075 for year one and $1,107 for year two, how much did the 2-1 buydown cost the seller?
A. $2,182
B. $3,000
C. $2,616
D. $3,382
Answer:C
A buyer purchases a home for which the seller pledges to fund a 2-1 buydown. The buyer’s note rate results in a payment of $1,200. If the 2-1 buydown would have the buyer remitting a P&I payment of $1,075 for year one and $1,107 for year two, how much did the 2-1 buydown cost the seller?
A. $2,182 B. $3,000 C. $2,616 D. $3,382