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
The portion of the monthly payment that is used to reduce the loan balance. ...
A lender that holds the loans it originates in its portfolio rather than selling them. ...
All the combinations of interest rate and points that are offered on a particular loan program. On an ARM, rates and points may also vary with the margin and interest rate maximum. ...
Cost-of-Funds Index, one of many interest rate indexes used to determine interest rate adjustments on an adjustable rate mortgage. ...
The most recently published value of the index used to adjust the interest rate on an indexed ARM. ...
Charging unwary borrowers interest rates and/or fees that are excessive relative to what the same borrowers could have found had they shopped the market. ...
A biweekly mortgage on which biweekly payments are applied to the balance every two weeks, rather than monthly, as on a conventional biweekly. ...
A sale price below market value, where the difference is a gift from the sellers to the buyers. Such gifts are usually between family members. Lenders will usually allow the gift to count ...
Authorization by the lender for the borrower to pay taxes and insurance directly. This is in contrast to the standard procedure, where the lender adds a charge to the monthly mortgage ...
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