The Decision to pay points or not..

When taking out a mortgage borrowers are often presented with the option of paying points. A point represents a payment at closing of one percent of the loan amount. In exchange for this upfront fee borrowers receive a reduction in their interest rate, typically around ¼ percent.

When faced with the decision to pay points the most important factor to consider is how long you plan on remaining in your home. If you plan on selling or even refinancing within two years it probably doesn’t make sense to pay discount points. If you do plan on holding the loan for at least 5 years you should consider paying points. It may cost you a bit more today but it will save you money in the long run. Our agents are available to meet with you to answer questions and guide you towards home ownership. Please call us to schedule an appointment.