@Anonymous wrote:
my rate on my FHA 30yr GFE yesterday was 5.125% with .625% points. Soooo, 5.750% with 0 pts?Message Edited by calichik555 on 03-17-2009 11:11 AM
Points don't work that logically, unfortunately. A "point" is 1% of the value of the loan - it is not related to the interest rate directly. To different lenders, a point may equate to different reductions in the interest rate. Moreover, even with the same lender, a point doesn't always buy down the rate by the same amount.
Here's an example. A FHA rate at 5.5% with no points (other than the origination point).
1 point might buy it down to 5.25%
but it might take 2.5 points to buy it down to 5.00% (so the first point was worth a 0.25% reduction, but it took 1.5 additional points to get the second 0.25% reduction.)
My guess is that your rate with 0 points would have been 5.25% or 5.375%. One of our loan officers might be able to make a better guess.
