Then, before applying, call more than one lender and ask what type of loan is best for you. Once you know the loan type, how many points to pay and whether you need a lock-in, you can shop. Many consumers are confused about the advantages of paying points. Remember that points are an upfront lender fee with one point equal to one percent of the loan amount. All lenders and mortgage brokers offer lower rates if you pay more points.
All lenders have zero point loans.
The trick is to identify which rate and point combination saves the most money. But you won't know the exact number of points to pay unless you do some calculations. An APR is supposed to tell you which loan is the better buy. It will not do this job accurately if the incorrect loan amount is used, or if the correct period of time you plan to stay in the house is not factored into the calculation. Using an APR to select a loan for refinancing will almost always be misleading.