The lender provides a rate to the mortgage broker or agent, for example 2.69% for 5 year fixed. The mortgage broker or agent wants to sell 2.59% to the clients. The lender will never pay any extra cost. So the lender will deduct the interest difference between 2.69% and 2.59% from the commission the lender will pay to the mortgage broker or agent. This 2.59% rate is called “Buying Down Rate”.
- What is qualifying rate?
- What is the best way to apply for a mortgage with the lowest rate?