Discount points allow you to lower your interest rate. While this video simplifies things to help you remember, “points” are essentially prepaid interest with each point equaling 1% of the total loan amount.
Generally, for each point paid on a 30-year mortgage the interest rate is reduced by 1/8 (or.125) of a percentage point.
When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases with each point paid.
Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment.
Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.
TitleTap
TitleTap provides turn-key websites and marketing tools like Video, Social Media Management, and Email Marketing for Title Agents and Real Estate Attorneys. Get more great marketing tips like this specifically relevant to Real Estate, Title Insurance, Mortgage Lending, and Law by subscribing or visiting our blog above.
Latest posts by TitleTap (see all)
- The 8 Best Websites for Attorneys - November 15, 2019
- The 5 Topics Every Attorney’s Website Chatbot Should Include - August 30, 2019
- How This One Page on Your Website Can Generate Leads For Years to Come - August 12, 2019
