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Can you buy points on a FHA loan?

Yes, sometimes with a FHA loan it may be beneficial to try to pay off 1 point (1% of the loan at closing) to lower your interest rate. However, it is not always a great idea to buy points for a loan. Here is an example. If the loan amount is $300,000 1 point would cost you $3,000. So the point loswers your payment $20 a month because of the lower rate, but you are already out $3,000. So it would take you 12.5 years to break even. You would have to stay in that house longer than that to make it a good investment.





 
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