What "loan buy down" does is if you pay more at the beginning for your loan fee, your interest rate will be lower and thus lower your monthly payment.

As an example, suppose you can find a 30-year fixed rate mortgage at 7 percent with no points (=$0 loan fee). On a $300,000 30-year mortgage your payment would be $1984.32 per month.

If you're willing to pay 1 point (1% x $300,000 loan = $3000) at closing, you can then "buy down" the rate to 6.75 percent so your payment will drop from $1984.32 to $1934.90 saving you almost $6000 over the next 10 years or $18,000 over the next 30 years.

The more you pay to buy down the loan, the smaller monthly payment becomes.