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Are Mortgage Points Worth It?

  • Writer: ernieturner
    ernieturner
  • Feb 2, 2022
  • 1 min read


There are some cases where buying mortgage points can save you a substantial amount of money over the life of your loan. While mortgage discount points are an excellent choice for some borrowers, they’re not right for everyone. To determine if mortgage points are right for you, there are two main questions to ask yourself.


How Long Do You Plan to Live in Your Home? The length of time you stay in your home is one of the most important factors. If you only plan to live in your house for a few years, it’s probably a better decision to pay lower closing costs and higher monthly payments. How Much Money Do You Have


to Put Down at Closing? If your down payment on a conventional loan is under 20%, you may be required to pay private mortgage insurance (PMI), which can cost about 1% of the loan amount annually. This is important for clients who are on the fence between paying for mortgage discount points or a larger down payment. If it’s between discount points and boosting your down payment to 20% or over, you’ll want to choose the down payment most of the time. Always do the math and consider if your discount points are costing you more or less than your monthly PMI fees.

There are a variety of factors that go into whether you should purchase discount points to buy down your interest rate. I can help you determine if mortgage points might be right for you!


 
 
 

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DISCLAIMER:  All information and views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated.  Every attempt to ensure that the information contained in this site is accurate, Ernie Turner is not responsible for any errors or omissions, or for the results obtained from the use of this information.  All information in this site is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information, and without warranty of any kind, express or implied.  In no event will Ernie Turner or his employer be liable to you or anyone else for any decision made or action taken in reliance on the information in this site or for any consequential, special or similar damages, even if advised of the possibility of such damages.  

 

Ernie Turner   NMLS#409198 

 1076 Highland Colony Pkwy - Ste 150 , Ridgeland, MS  39157 

 

 Call:  (601) 941-6276

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