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    godlyman's Avatar
    godlyman Posts: 1, Reputation: 1
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    #1

    Aug 24, 2009, 11:06 AM
    Using points to lower the rate
    I'm looking to refinance. I found out from a local bank this morning that for a 30-yr. fixed rate mortgage, I can get a rate of 5.375% with 0.875 discount points. I assume that I have excellent credit. Would I be able to buy an additional 1.125 points, for example, to get the rate down to 4.25%? I know that 1 point = 1% of the loan amount. Thanks.
    stevetcg's Avatar
    stevetcg Posts: 3,693, Reputation: 353
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    #2

    Aug 25, 2009, 05:34 AM

    Doubtful.

    Each lender will have a scale of points. Typically, the more points you buy, the lower return on investment you get.

    Meaning... the first point might get you half a percent, but the second might only get you a quarter. They will also cap the amount you can buy (or everyone would pay 6 points up front and take a 0% loan)
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