If you're shopping for a mortgage May wonder if paying points is necessary, or even a good idea. Here is what you need to know about pre-paid points on your mortgage loan.
points, often called "discount points" paid to the lender when you close the mortgage. This is a fee, or prepaid interest, you'll pay in exchange for some aspect of the mortgage. You may pay discount points in exchange for a lower interest rate, better terms, or even just to qualify for a mortgage loan.
What are points?
One point is equal to one percent of the loan balance. If the lender requires you to pay one point to close, and you are borrowing $ 150,000, you'll pay the lender $ 1,500 for closing on a mortgage. Many lenders charge between one and three points on the loans.
Do you pay points?
answer to this question depends on your individual circumstances. If you have excellent credit May not be required to pay upfront points. If you have bad credit, you can count on the score lenders require as a condition of being approved for a mortgage loan.
answer to this question depends on your individual circumstances. If you have excellent credit May not be required to pay upfront points. If you have bad credit, you can count on the score lenders require as a condition of being approved for a mortgage loan.
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Do you want to pay points?
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