Certificate Backed Mortgage

Concept of Certificate Backed Mortgage in the context of Real Property

A short definition of Certificate Backed Mortgage: A variation of the buydown. The seller purchases a savings certificate (usually with the proceeds of the sale) from the lender. The lender sets the buyer’s interest rate below market (generally 2 percent above the certificate rate). Should the seller withdraw the certificate funds, the buyer’s rate goes to market rate.

Concept of Certificate Backed Mortgage in the context of Real Property

A short definition of Certificate Backed Mortgage: A variation of the buydown. The seller purchases a savings certificate (usually with the proceeds of the sale) from the lender. The lender sets the buyer’s interest rate below market (generally 2 percent above the certificate rate). Should the seller withdraw the certificate funds, the buyer’s rate goes to market rate.