When you pay "points," you pay interest in a lump sum upfront to get a lower rate
on your fixed rate mortgage.
Each point costs 1% of the mortgage amount. The more points you pay, the lower your
mortgage rate. So, which is the best for you? More points and a lower rate? Or fewer
points and higher rate?
To decide, you need to consider: (1) Whether you can afford to make the upfront
payment now for points. (2) The length of time expect to have the mortgage. The
longer you plan to have your mortgage, the more it makes sense to pay for points
now because you'll have a long time to benefit from the lower rate. Answer the questions
below and we'll advise you on what's best for you.
How long do you expect to stay in your next home?