Should I Pay Points For A Lower Rate?
Paying points for a lower interest rate is a trade off between paying money now versus paying money later. A point - equaling 1% of the total loan amount - is an upfront fee that reduces your monthly interest rate and total interest due over the life of a loan. Use our calculator to figure out the cost and effective saving of loan points as well as the minimum amount of time it will take to recover your loan points.
Popular Mortgage Questions
Popular Mortgage Glossary Terms
A facility offered by some lenders to mortgage brokers where de jure the brokers become employees of the lender but de facto they retain their independence as brokers. One of the ...
The longest period for which the lender will lock the rate and points on any program. On most programs, the longest lock period is 90 days; some go to 120 days and a few to 180 days. It ...
An upfront cash payment required by the lender as part of the charge for the loan, expressed as a percent of the loan amount; e.g., '3 points' means a charge equal to 3% of the loan ...
The interest rate or rates and upfront fees paid to the lender and mortgage broker. Some upfront charges are expressed as a percent of the loan, and some are expressed in dollars. The ...
A documentation option where the applicant's income is disclosed and verified but not used in qualifying the borrower. The conventional maximum ratios of expense to income are not ...
An option attached to a mortgage, which allows the borrower to pay only the interest for some period. A mortgage is 'interest only' if the monthly mortgage payment does not include any ...
The most recently published value of the index used to adjust the interest rate on an indexed ARM. ...
A payment made after the grace period stipulated in the note, usually 10-15 days. ...
The maximum allowable ratio of loan-to- value (LTV) on any loan program. Generally, these are set by mortgage insurers or by lenders and can range up to 100%, although some programs will ...
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