Mortgage Buydowns - How to Buy Down a Mortgage

Mortgage buydowns -- what is that? You've probably heard the term before, but if you're like most people, it might not make a lot of sense to you. In part, the reason it may sound confusing is because a mortgage buydown rarely results in a permanent lower monthly payment nowadays; it's only temporary. Mortgage Buydowns Do Not Involve <a href="/od/glossaryno/g/negamort.htm">Negative Amortization</a> For many borrowers, a mortgage buydown is more advantageous than choosing, say, an adjustable loan with a payment option that allows for negative amortization like an <a href="/od/financingadvice/qt/OptionARM.htm">Option ARM</a>. That's because with mortgage buydown programs, your mortgage payment always includes principal and interest. This means every time you make a payment, your mortgage balance grows smaller instead of bigger. Basics of Today's Popular Mortgage Buydowns Popular mortgage buydowns work like this.  more