Many people think paying points to buy down the interest rate is a waste of money. If you are going to stay in the home or keep the loan long time it may be in your best interst to pay points to obtain a lower interest rate.Today points buy you a lower rate than int he past:
.50 point lowers the rate by nearly .20%Historically .50 point lowered the rate by .125%
- Points paid on a purchase transaction are a tax deduction in the year of the close of escrow
- Paying points can dramatically reduce the interest rate on the loan
- Lowering the rate lowers the payment, lowering the income needed to qualify
- A lower rate saves the buyer thousands of dollars over the life of the loan
- There’s never been a better time to buy down a rate
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