What Does It Mean To Pay Mortgage Points?

When you pay mortgage "points" you are paying 1% of the loan amount per point, in turn for a lower interest rate. It is also generally an option to take a slightly higher interest rate and have some or all of your closing costs covered in return. Essentially if you will be charged a certain amount to borrow the money in a mortgage loan you are choosing to either pay more up front and less each month as part of your payment, or less up front and more each month as part of your payment.

Considering whether to pay points

Only you can decide if you want to pay points to lower the interest rate on your home loan. Talk to your tax professional and your American Financial Resources loan consultant to get their advice. One thing to consider is how long you will be in your home as the longer you hold the mortgage the more you will benefit from the lower monthly payment. Plug the numbers for your situation into an online mortgage calculator to see how paying points will affect your payment and the amount you will have to bring to closing.

Learn more about mortgage points from American Financial Resources

At AFR our mortgage consultants are true financial professionals, and are passionate about helping their clients understand the nuances of mortgage lending such as paying points or comparing home loan programs. Give us a call at 800-316-9508 to speak to someone right away. If you would prefer to start with a quote for the current interest rates complete the quote request form, or if you are ready to move forward simply get started online.