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A "Buydown" is when someone pays extra money upfront to lower their monthly payments on a loan, like a home loan. It's like paying more now so you can pay less later.
For example, imagine you're buying a house and getting a loan to pay for it. The monthly payment is a bit too high for you, so you pay some extra money at the beginning, which makes your monthly payments lower and more affordable.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
When buying a house, a loan you might need,
But the monthly payments might make your wallet bleed.
To make them less scary and easier to pay,
A Buydown is used to keep worry at bay.
You pay extra money at the start of the deal,
And the payments each month shrink, making you squeal.
A Buydown, my friend, is a wonderful thing,
Lowering payments so you can live like a king!