How much money goes to the lender when you buy down a home loan?

I recently refinanced my home loan and wanted a lower interest rate. The lender offered me the option of buying down the interest rate. How much more money does he get from this buy down?

That varies form lender to lender.

If an % rate is at 6.25 that might pay the loan officer 2 points on the loan amount. Maybe that is the loan officers expected earning. If you "buy it down" to 6% they would still make 1 point, So if you "buy it down" it just means you paid the difference in what they where hoping to make in the first place. Keep in mind everything is negotiable. At the same time the loan officer deserves to make a profit. Maybe question how much they are making from the lender in the first place. We have to disclose that info. on the good faith estimate.

Example: If I expect to make 2 points on a loan the investor may charge 1.25% to the rate to do so. If that's the case I will let the client know if they would rather have a lower rate I can charge them 1 point upfront (I can raise the loan amount to cover it) and get the other point form the lender.

It depends. Typically when we honest mortgage people do this, we are trying to earn a specific amount. To do this we can charge you, the bank, or you and the bank. When you buy down the rate, you are pre paying interest. This is different then what the loan officer will earn.

Main question is, do you have the rate you want, and is it at a price you think is reasonable and is the person doing a good job.

You get what you pay for generally.

However, you can call any company and just ask, how much would I have to pay in points (not points to the lender but just buy down points ) to get this rate (what you wanted). They can probably tell you quickly.

Good Luck