Buying or Renting - Home Sweet Home

[Metalfan]

what do points do?

Points are a percentage of the purchase price of your home, such as 1% or 2%. Paying these up front fees can allow you to get a lower mortgage rate than you would by paying 0 points. The rationale behind it is that by paying this up front charge, you will save considerably more in interest payments over the lifetime of the mortgage.

Usually you would pay points if it would make the mortgage payment fit into your budget, or if you plan on staying in the house until the mortgage is paid off. If you don't plan on staying in the house that long and can afford the higher monthly payment otherwise, avoid points if at all possible.



Edited By Metalfan on 1048017910