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The answer to this question is different for each borrower. However if you are refinancing and rolling your costs into the loan it will probably be smart to buy loan discount points.
Example: Mr. and Mrs. Smith need a loan for $100,000 including the closing cost. They borrow this money at a rate of 7.750%; the P&I (Principal and Interest) is $716.41 per month. If they buy down one point and roll this amount in the new loan will have a lower note rate of 7.500% but the loan will have to be increased to $101,000 the new P&I is 706.20 thus they will save is $10.21 per month.
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Should I pay 
