Many of our buyers are purchasing Bank Owned properties with substantial credits for closing costs.  Often we find that we have more seller credit than initial closing costs.  So, rather than buying down the rate we have been buying down the mortgage insurance.  It is pretty simple.  We pay a portion or even all of the mortgage insurance (MI) up front with the seller's money and reduce or eliminate the monthly MI.  This strategy can reduce the monthly payment about 5 times more than buying down the interest rate.

If you are putting less than 20% down ask about pre-paying MI.