Mortgage Buy Down Points
Can Improve Your Interest Rate

HOW DO YOU "BUY" A BETTER RATE?

Should you buy mortgage buy down points? Do you plan on keeping your loan for a while? Then it may make sense to "buy" a lower interest rate by paying one or more "points."

Even if you're unsure of how long you plan to keep your mortgage before you move or refinance, paying points now for a lower rate may make sense. For example, do you have a high-paying job now but you think you might change careers in the next few years? Your lender will be able to help you sort it out. It's part of your lenders job to find the right loan for your means and goals.A "point" which equals one percent (1%) of the total loan amount is an up-front fee that lowers your monthly interest rate and total interest due over the life of the loan.

So, a one "point" loan will have a lower interest rate than a no point loan. Basically, when you pay points you trade off paying money later in favor of paying money now. You can pay fractions of points, meaning there are a lot of mortgage buy down point(s) packages that can make a loan's terms more favorable if that's what's right for you.

There are a variety of rate and point combinations available. When you look at different loan programs, don't look just at the rate - compare the whole package.

Federal law requires lenders to publish their loans' Annual Percentage Rate, or A.P.R. The A.P.R. is a tool used to compare different terms, offered rates, and points.

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