For each "point" you pay on a mortgage, you get a one-quarter percent reduction in the interest rate. you want to get a .375% reduction on your interest rate. how many points do you have to pay?

You have to pay one and a half "point" in order to get a .375% reduction in your interest rate payment. On the first interest payment, you already had .25% reduction in your interest payment, thus you need an extra of 0.125% which you can get from a half point of interest payment (0.125% = 0.25%/2).

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