What Are Mortgage Points?

Mortgage points are often referred to as rate discount points. You pay your lender a specified fee for a lower interest rate. Each point costs 1% of your total mortgage loan. Many new home buyers decide to purchase points to ensure that they will have a lower monthly payment.

Estimation of possible savings for a $200,000
30-year fixed rate mortgage:

*Disclaimer:  These numbers are strictly hypothetical and highly simplified to illustrate points concepts. They are not meant to reflect any specific scenario.

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Mortgage Essentials

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