Hence, instead of negotiating strictly on price, the buyers would also negotiate for buy-down points. Check with your loan officer about specific details on a loan that interests you. In some cases the borrowers have a relocation plan that pays a specified number of discount points. Depending on the circumstances of the borrower, it may be more beneficial to apply the discount points to a buy-down instead of a lower note rate. A loan officer can assist with this analysis.
Some borrowers use a temporary buy-down as a means of accelerating tax benefits.
In order to move tax deductions into the year of closing, discount points are paid for the buy-down. Although the tax benefits are slightly reduced during the subsequent buy-down period, the payments are also lower. Check with your tax advisor on the feasibility of using this strategy. A buy-down may make sense for you. Discuss your objectives with a loan officer for the best combination of loan program, fixed or adjustable rate, and buy-down possibilities.