What is this?

Please do not laugh at this question,but what is a “buydown”?

We don’t laugh at questions here…just at the people asking them…

LOL, just kidding.

Buy Down - A payment of discounts points in exchange for a lower rate of interest. It has the effect of providing the lender with a greater yield today in exchange for a lower yield in the future. (See definition of “discount points” below.).

This definition is found in the Investiong Glossary (look to the column under “Site Navigation” to your left…



you can also buy down a pre payment penalty