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A 3-2-1 mortgage buy-down is a financing strategy where the borrower pays a lump sum upfront to reduce the mortgage interest rate for the first few years. The '2-1' part refers to a reduction in the interest rate by 2% in the first year and 1% in the second year. Pros include lower initial payments and potentially qualifying for a larger loan. Cons include higher upfront costs and potential refinancing expenses after the reduced rates expire. It's complex and may not benefit all borrowers.

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