There are many types of rate buydowns available. This video talk about a 1 year buydown. This means the buyer enjoys an interest rate that is 1% less than their fixed rate for one year. After that year the interest rate goes back to the normal rate. The idea behind this is for the buyer to enjoy lower payment for the first year in the hope that interest rates go down over that time and then the buyer can refinance at a lower rate. As an example, on a $250,000 home that would lower the payment roughly $160 per month. A buydown can be paid for by the either party, the buyer or the seller and the cost depends on the purchase price. Buydowns can be arranged for conventional, FHA, and VA loans. Please like and subscribe to our YouTube channel!