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Strategies to lower your mortgage interest rate

A look at paying points, securing second loan

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Interest rates on jumbo mortgages jumped about 3/4 percent in mid-August. Before settling for higher rates or giving up altogether, consider the following ways you might lower your financing costs. Even though jumbos increased in price, conforming rates -- for mortgage amounts up to $417,000 -- decreased. On Aug. 20, for example, it was possible to find a 30-year fixed-rate conforming mortgage for 6.25 percent and one point. At the same time, jumbo mortgages over $417,000 were going for 7.25 percent and one point. "Points" is a term lenders use for a mortgage origination fee that's paid by the borrower one time only at closing. One point equals 1 percent of the loan amount. By paying more points upfront, a borrower can lower the mortgage interest rate for the term of the loan. Points are tax-deductible on purchase mortgages in the year of purchase for those borrowers who itemize deductions. Restrictions apply, so be sure to check with your tax advisor to see if paying p...