Mortgage discount points are calculated as a percentage of the loan amount. Paying for lowering your points up front will allow you to pay less interest over the lifetime of your loan.
One point is equal to 1% of the total cost.
Example: if the amount is $350,000 of the home loan, the 1% of this would be $3500. These points are paid at the closing table. The reduction of your interest rate that will be discounted depends on several factors including the specific lender, loan type and overall mortgage market conditions in your area.
Lenders determine their own pricing that is why it's important to shop for your mortgage lender and ask them to provide specific examples of your overall costs.
The national housing survey found that in 2018 more than 1/3rd of Home buyers did not shop around before selecting their mortgage lender.
Author:Karin Waterschoot-Perez Phone: 614-774-1741 Dated: December 13th 2019 Views: 21 About Karin: Experienced Realtor, Karin Waterschoot-Perez, currently serves buyers and sellers located in and aro...
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