What Are Mortgage Points And How Do They Work?
It's crucial to realize that all interest rates offered for a mortgage home loan are either credit-based which means that the lender will either pay you or pay for a portion even the entire closing costs at the rate you choose or a price you have to pay (discount points) to get a lower than average interest rate.
Loan Amount $250,000.00 $250,000.00 Interest Rate 3.50% 3.00% Discount Points N/A 2 Points @ $5,000.00 Monthly Principal and Int.
"How many months before I break even in example 1 to determine if you should pay points for a lower rate?"
Loan Amount $250,000.00 $250,000.00 Interest Rate 3.00% 3.50% Lender Credit Points N/A 2 Points @ $5,000.00 Monthly Principal and Int.