One of the most important decisions a borrower will have to make is to obtain a mortgage that has points connected to it or nt.  Here is a simple rule of thumb that you should use.  If you are planning on owning the property less than 5 years, the thought process should be to pay zero to one point at the most.

If you are planning on owning this home for more than 5 years you should attempt to pay as many points as necessary to buy the rate down as low as you can.  The more points you pay, the lower the rate.

It is not uncommon for borrowers to pay 4 to 5 points to buy the rate down below what is available in the marketplace.

It takes approximately 48 months to payback the cost of points; therefore if your mortgage is 15 - 30 years the interest savings become a very good investment.