If you are in the market for a mortgage to buy a house you’ve no doubt heard the term “points” being thrown about. No, they aren’t talking about the score from last night’s NFL game; they are actually talking about a fee that is paid to the lender of the mortgage you are taking out to buy your home. Points can have impact on your mortgage, both positive and negative, so being informed about how they can help and hurt you is crucial when determining if a mortgage loan is the right fit for you.
The Case Against Paying Points
Points seem like a good idea, after all, the interest rate is lowered. But if you don’t have cash on hand in advance, paying points can seem just out of reach. Do you need to pay points?
Mortgage Points
If you have ever gone looking for quotes on a mortgage in order to find out just what a mortgage might cost you, you have probably had the term points thrown at you. So what are points?