💡 How to Get a Lower Rate Without Paying Points on a Refinance or Purchase 🏡🔥

🏆 The #1 Trick to Get Lower Mortgage Rates Without Paying Points 💰📉

Bill Rapp, Commercial Mortgage Broker

February 05, 2026•2 min read

🏆 The #1 Trick to Get Lower Mortgage Rates Without Paying Points 💰📉

💡 How to Get a Lower Rate Without Paying Points on a Refinance or Purchase 🏡🔥

🏆 The #1 Trick to Get Lower Mortgage Rates Without Paying Points

Most borrowers assume there are only two ways to lower their mortgage rate:

• Pay discount points
• Wait for rates to drop

That’s wrong.

The real trick lenders don’t explain clearly is this:

Strategic lender credits can reduce your effective rate without paying points—often with little to no out-of-pocket cost.

At Medallion Funds, this strategy is one of the most powerful tools we use to structure low-cost refinances and purchases for smart borrowers.

🔍 What Are Mortgage Points (and Why They’re Often Overused)?

Mortgage points are prepaid interest—typically 1% of the loan amount for a marginal rate reduction. While points can make sense in long-term holds, they often fail the break-even test for:

• Homeowners planning to refinance
• Buyers expecting mobility
• Investors optimizing cash flow

Paying points locks capital into a lender—not into your balance sheet.

💡 The Real Strategy: Lender Credits + Smart Pricing

Instead of paying points, lenders can credit closing costs in exchange for slightly adjusted pricing—without materially increasing your payment.

This allows borrowers to:

✔ Reduce or eliminate closing costs
✔ Preserve liquidity
✔ Achieve a competitive effective rate
✔ Shorten break-even timelines

This is especially effective for:

• Rate-and-term refinances
• Purchase transactions with seller credits
• Self-employed borrowers managing liquidity
• Investors focused on ROI, not vanity rates

📊 Example: Points vs. Low-Cost Structure

Scenario:
$450,000 loan

Option A – Pay Points
• $9,000 upfront
• Rate reduction: ~0.25%
• Break-even: 6–8 years

Option B – Lender Credit Strategy
• $0–$1,500 out of pocket
• Comparable effective rate
• Break-even: Immediate

Same loan. Same property. Very different financial outcomes.

🧠 Why Most Borrowers Miss This

Retail lenders sell rates, not structures.

They quote what’s easiest—not what’s optimal.

As a broker, Medallion Funds shops across dozens of lenders to engineer pricing that balances:

• Rate
• Fees
• Cash flow
• Time horizon

This is underwriting strategy—not salesmanship.

🏡 Refinance or Purchase—This Works for Both

Refinances:
Lower monthly payments without resetting your cash position.

Purchases:
Pair lender credits with seller concessions to reduce cash to close—without inflating the rate unnecessarily.

🔑 Bottom Line

The #1 trick to lower rates isn’t paying points—it’s structuring the loan correctly.

If your lender only talks about rate, you’re missing half the equation.

📞 Want a Custom Low-Cost Loan Structure?

We analyze:
• Your time horizon
• Cash flow goals
• Refinance likelihood
• Opportunity cost of capital

📲 Subscribe to the YouTube channel for weekly breakdowns
📩 Or reach out directly to structure your loan the right way

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Bill Rapp - Commercial & Residential Mortgage Broker

Whether you're a first-time homebuyer, a seasoned investor, or a business owner with ambitious plans, securing the right financing is crucial. At Medallion Funds, we take the guesswork out of mortgages, offering a comprehensive suite of residential and commercial loan options to fit your unique needs. Looking for Your Dream Home? We understand the excitement and challenges of navigating the residential real estate market. Our experienced mortgage brokers will guide you through every step, from pre-qualification to closing. We offer a variety of loan programs to suit your financial situation, including: • Fixed-rate mortgages: Offering stability with predictable monthly payments. • Adjustable-rate mortgages (ARMs): Providing competitive rates for a set period. • FHA loans: Making homeownership accessible with lower down payments. • VA loans: Rewarding veterans with attractive rates and flexible terms. Investing in Your Business Future? Growth often requires capital, and we can help you unlock the potential of your commercial property. Our brokers specialize in a wide range of commercial loan options, including: • Purchase loans: Financing the acquisition of new buildings or land. • Construction loans: Facilitating the development of your project. • Refinance loans: Restructuring your existing mortgage for better terms. • SBA loans: Providing access to government-backed financing for qualified businesses. The Medallion Funds Difference: We go beyond simply finding a loan. We take the time to understand your goals and develop a personalized strategy. Here's what sets us apart: • Expertise: Our brokers have a deep understanding of both residential and commercial lending. • Competitive Rates: We leverage our strong lender relationships to secure the best possible terms. • Streamlined Process: We handle the paperwork, keeping you informed every step of the way. • Exceptional Service: We're committed to providing you with a positive and stress-free experience. Ready to Take the First Step? Contact Medallion Funds today for a free consultation. Let's discuss your financing needs and help you achieve your dreams!

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