This year we did close on a 3-2-1 buydown and it saved our borrower $23,000 over the first three years of his mortgage. 3-2-1 buy-downs are tough to negotiate and I take my hat off to the Realtor who did that.

2-1 buy-downs and 1-0 buy-downs are more common and easier to negotiate because there is less money involved.

For this to work properly, we need to calculate how much the buy down will cost so we know how much of a seller paid closing cost we need to write into the contract. Buy-downs need to be dealt with when you are making the offer.