Take the cost of the points, divide it by what you save per month on the mortgage payment, to arrive at the number of months to break even. Then, decide if you are planing to stay longer or shorter  in your home than that. 

Then ask yourself, would you rather have the money that you pay in points, or rather have the monthly savings?

I don't... it's up to the borrower and the lender to determine when/if/how it makes sense.

 ##   I will leave the discussion about points, basis points, yield, percentages, etc. to the Lender.

In general it is better not to pay additional points to buy down a rate, unless you have to to qualify. A .5% in fee does not equal .125% in even rate increments. Paying points for a loan means you intend never to refinance and plan to keep the property longer than 7 years

Senor Bob Betel answered your question for you.

I leave that to the buyer & lender.

I don't, unless I'm the one getting th eloan. then I use th emethond Bob Betel describes.

I do not. It is up to a buyer to discuss all loan products with a lender. 

I leave that up to the buyer and the loan officer to decide.

if it's a long term investment, pay points...if it's short term, don't....

Minnette - I think Bob Betel did a great job explaining how to determine whether loan origination points are worth it or not.

This is a question I let the finance people answer.

Nothing I could add to Bob Betel's answer.

Short, easy answer?  Long term, points are a good thing.  Short term (for those that sell/refi/etc within just a couple years) points don't make sense.

Different circumstances for everyone, but that's the gist.  

I don't.  That's for a lender to explain and the buyer to decide.  Personally, I don't do points.

Haven't had a client in many years buy down but my old rule of them is if you don't save more in three years than the money put into the buydown, it isn't worth it. 

Minnette Olsen Loan origination points are charged by the lender for processing, evaluating and approving a mortgage. These fees are determined by the lender and are negotiable between the buyer and the lender.

On the other hand, mortgage or discount points is in essence pre-paid interest to buy down the interest rate on a loan. The buyer should do an analysis to determine if it is a cost benefit for a lower monthly payment up front.

That's a good question for a buyer to ask their mortgage professional and for the mortgage professional to listen to the buyer.  

That is determined by the buyer and loan officer.

In discussion with the lender, the buyer weighs the pros and cons.  It depends on the type of loan they need and how long they anticipate being in the home or how quickly they plan to pay off the mortgage.   It is not something the agent is involved in at all.

That's a discussion between the buyer and lender around the financial pros or cons. And the best interest rate might necessiate paying them.

It's more a matter of are they competitive with other lenders.  You can't borrow money without paying an origination fee.  

If you mean buying down the rate, that depends upon how long you plan to stay in the home.  They longer you stay the more important a lower rate is to you.

I don't...questions like this are referred to the lender since that is their field of expertise. Bob Betel gave a great answer.

Bob Betel expained this pretty good.

I like the answer by Bob Betel. 

I personally don't - that's between the Buyer and their Lender...

Basically how long a buyer will stay in the home. Points are profit for the loan officer so in most cases under 7 years no points.

Once upon a time! Today, not so much!

The loan officer can explain it to you.

No need to do so in our great land since points are not used here.

Minnette Olsen - simple math. If it brings down the rate enough to repay in number of years the owner will stay in home, go for it!

Look at how long it takes to pay off the extra points, and consider how long you'plan to own the house.

Do the math and figure out when you will cross over the break even. It is usully never a good idea if the property is going to be held short term.

I don't, the lender does.

I want the lender to discuss this with the buyer..he is the professional I don't pretend to do his job!

Subjective. If it gets you from point a to point b and that is the journey, ante up. What else is money for I ask you?

only if one will hold on to that loan for years. Need to determine breakeven point(yrs).  Chances in 6 months new borrowers most are refin.