My understanding is that you can get financing without points but the rate is much higher. You can tell your loan officer no points and they will let you know it makes more sense to pay points but if you insist they should accomodate your request.

Yes, that seems to be the standard. If you see someone with a lower rate, check the other fees and/or the interest rate to verify they didn't hide it in there.

My understanding is that almost all mortgage brokers/lenders charge 1% loan origination fees which is separate from buying points to get a lower interest rate. Am I on the right track?

I have found that the charging of points varies by state.

In Florida, points are hardly ever charged, in fact, I don't think a single one of my buyers there, including me, has ever paid points.

In Minnesota, every singe banker and mortgage broker I have ever met charges at least one point on the loan. When I moved to Minnesota and asked about this common practice, lenders were actually offended that I disagreed with the blanket charges of points to every buyer in Minnesota.

Make the seller pay for your points. The seller will usually put a monetary limit on the points.

Estherk-
I have been a mortgage banker for 21 years and I have paid points on my own purchases. It all depends on how long you really expect ot be in the home. If you are going to be in there for a long time then pay points to get a better rate ( include the points in your new loan if you can ) you will re-coop in a few years. If you plan on selling or refinancing within the re-coop time then negotiate to not pay points. good luck and let me know if I can assist with your new loan.

thanks

Tino Martinez
630-835-9044
First Capital Mortgage
tinomax@mchsi.com

1) Yup, sometimes more, sometimes less, depends on the rates that day and how much you buy the rate down

2) The points are tax deductible either way if I recall correctly (check with your tax advisor) but by rolling it in, you are not coming up with the $ out of pocket but are paying it back over 30 years.

3) It can be worthwhile... it all depend on how long you want to stay in your house and how much it costs to buy down the rate.

I'm in the process of buying a house and I'm looking at doing a small rate buydown, but too much buydown ends up costing too much.