Buy Down Points — Mortgage

To determine if a buy-down is right for you, follow these steps: : Calculate 1% of your loan amount per point.

Buying down mortgage points (also known as ) is a strategy where you pay an upfront fee at closing to lower your interest rate for the life of the loan. It is essentially prepaid interest ; one point typically costs 1% of the total loan amount and reduces your rate by approximately 0.25% . When It Is Worth It buy down points mortgage

: It is a strong financial move if you plan to keep the loan long enough to reach the "break-even point" . This is when the monthly savings from the lower rate finally exceed the initial cost of the points. To determine if a buy-down is right for

: Divide the Total Cost of Points by the Monthly Savings . When It Is Worth It : It is

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To determine if a buy-down is right for you, follow these steps: : Calculate 1% of your loan amount per point.

Buying down mortgage points (also known as ) is a strategy where you pay an upfront fee at closing to lower your interest rate for the life of the loan. It is essentially prepaid interest ; one point typically costs 1% of the total loan amount and reduces your rate by approximately 0.25% . When It Is Worth It

: It is a strong financial move if you plan to keep the loan long enough to reach the "break-even point" . This is when the monthly savings from the lower rate finally exceed the initial cost of the points.

: Divide the Total Cost of Points by the Monthly Savings .