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Points for Home Mortgage Loans |
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Paying Points for Home Mortgage Loan Transactions - "Mortgage Points” are upfront fees that you pay in order to lower your mortgage interest rate. One point is equal to 1% of the loan amount.
 In the past, it didn't make sense to pay points when refinancing your mortgage. However, enormous changes have taken place in the mortgage securitization process.
Higher upfront fees are being demanded for borrowers with credit scores below 740, and mortgage lenders don’t have as much flexibility when pricing loans. This means that the interest rate savings can be very significant when you pay upfront points.
When buying home, negotiate into your purchase contract for the seller to pay points on your behalf. In addition to the significant interest and payment savings you will enjoy, you will also receive a tax deduction this year for points paid by the seller on your behalf.
If you are selling a home, offer to pay points for potential buyers as part of your marketing plan. This will make your home more affordable for potential buyers and help your listing stand out from others today’s real estate market.
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