Can I Ask the Seller to Pay for a Rate Buydown on a Woodland Hills Home?

Jonathan Lopez, Jim Sandoval Group | Woodland Hills Realtor | CA DRE #02282844 · Updated October 2026

If you are shopping for a home in Woodland Hills right now, the number that probably worries you most is the mortgage rate. Freddie Mac's survey released October 8, 2026 put the 30-year fixed at 7.40%, up from 6.30% a year earlier. You cannot negotiate the market rate, but you can sometimes negotiate who pays to lower yours. This is where a seller-funded rate buydown comes in.

What a buydown is

A seller credit at closing pays the lender to reduce your rate. A permanent buydown (often called paying points) lowers the rate for the life of the loan. A temporary buydown, such as a 2-1, lowers it for a set period. In a 2-1, your rate is 2 points lower in year one and 1 point lower in year two, then returns to the note rate from year three. HomeLight (updated Sep. 2, 2026) describes the mechanics and shows the seller cost for a 2-1 on a sample loan at about 2.3% of the loan amount (my calculation from their example).

What it could look like in Woodland Hills

Use the Woodland Hills median of $1,299,000 (Movoto, updated October 9, 2026), 20% down, a $1,039,200 loan and a 7.40% note rate. My own amortization math gives principal and interest of about $7,195 a month at 7.40%, about $5,835 in year one of a 2-1 (5.40%) and about $6,500 in year two (6.40%). That is roughly $1,360 a month saved in year one and $695 in year two, for a total seller cost near $24,700, or about 1.9% of the price. By comparison, a $24,700 price cut reduces your loan by about $19,700 and your payment by only about $137 a month, but the savings never expire. These are illustrations on stated assumptions, not a quote, and they exclude taxes, insurance and any mortgage insurance.

Is it allowed?

Lenders cap how much a seller can contribute. For a principal residence under Fannie Mae's Selling Guide (B3-4.1-02), the cap is 3% of the lower of price or appraised value when your down payment is under 10%, 6% when you put down 10% to 25%, and 9% when you put down 25% or more. The guide states the cost of a seller-funded temporary or permanent buydown must be included in that calculation. On a $1,299,000 price, 3% is $38,970 and 6% is $77,940 (my arithmetic). FHA, VA and jumbo loans have their own rules, so confirm with your lender before you write the offer.

When a seller might say yes

Movoto reports 50 days on market in Woodland Hills versus 44 a year ago, and 79 of 405 active listings have cut their price. That does not mean every seller will bend. A seller with a strong offer in hand has little reason to, and a credit effectively lowers their net just as a price cut does, though often by less than the buyer saves in the early years. It is a negotiation, not an entitlement.

What to weigh before you ask

First, a temporary buydown helps only if you can afford the full payment later, so qualify at the note rate, not the bought-down rate. Second, if you plan to refinance when rates fall, the lower early payments may suit you. Third, the appraisal still has to support the price, because a credit does not change what the home is worth. Fourth, ask your lender for a written comparison of a price reduction versus a credit before you decide.

Frequently Asked Questions