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Mortgage Points



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You could save thousands of dollars, over the life of your mortgage with mortgage points. They are not always the correct option for everyone, so there are some considerations to think of when applying for a mortgage.

What Are Mortgage Points?

Paying your lender in exchange for a lower interest rate is what defines mortgage points. This expense is paid at closing, and is included as an addition to your closing costs.

The Benefit of Mortgage Points

Mortgage points help lower your interest rate, and the primary benefit is that they have the potential to save you a decent amount of money over the life of your mortgage. If you are planning to keep your house long enough to recoup this cost, then this would be a good investment. This is also a good benefit is your are refinancing and plan on staying in your house to get get the value of your investment.

When Not to Buy Mortgage Points

Although mortgage points and a low interest rate are important items to consider when purchasing a home, you should determine the potential time frame you will live in that home. If you are buying with the intent of selling within the next few years, the out-of-pocket investment may not be worth the return.