Should I pay points to lower my interest rate?
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If you plan on staying in the property for at least a few years, paying discount points to lower the loan's interest rate can be a good way to lower your required monthly loan payment (and possibly increase the loan amount that you can afford to borrow). If you only plan to stay in the property for a year or two, your monthly savings may not be enough to recoup the cost of the discount points that you paid up-front. Ask your lender how long it would take for your monthly savings to recoup the costs of the discount points. |
Common Home Loan QuestionsWhat are points? Should I pay points to reduce my rate? What is an APR? Should I lock in my interest rate? How is my credit score used? How can I improve my credit score? What is an appraisal? What is PMI? What happens at closing? |
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