Mortgage Loan Points
Points are an amount that can be charged to the buyer to "buy down" the interest rate. In other words, the buyer pays money up front to get a below market interest rate. A "par" rate is rate for which there is no charge to get that particular interest amount. Par rates change daily and sometimes even several times during the day, depending on what the financial markets are doing. Sometimes the seller can be asked to pay points on behalf of the buyer.
Depending on how long you are going to own your property, paying points to buy down the interest rate can be a smart move, saving you thousands of dollars in interest payments over the years. On the other hand, if you are only going to own your home a short time it may be smarter to pay a higher interest rate and let the lender absorb some of your closing costs for you.
We will be happy to help you analyze your particular situation and let you know at what point you would "break even" - in other words, make back your points money, so that you can decide if this would be advantageous to you!
Easy Online Mortgage Application
Feel free to fill out the information below, and we will have a mortgage consultant help you analyze whether paying more points up front would be advantageous for your next home purchase.