Buying Points

can someone explain this to me?

and once you did....can you tell me is this something that people do...meaning is it worth it?

Re: Buying Points

You mean buying your rate down on a mortgage. You have to run the numbers. Sometimes it can make sense but find an ammortization calendar and figure out what makes more sense do you know how much it is to buy down?

ETA the 1st sentence is a question

Message edited 7/31/2006 9:24:02 PM.

Re: Buying Points

if you buy points, it means that you pay a fee upfront to lower your interest rate. Each poin t you pay is equal to 1% of the loan.

I believe this works for people who plan on staying in the same home for a long time.

Re: Buying Points

Re: Buying Points

I never understood this either
ETA: When you buy one point is that taking 1% of the interest rate?

Jenn did you find a house?

Message edited 7/31/2006 9:41:33 PM.

Re: Buying Points

Posted by julz33

I never understood this either
ETA: When you buy one point is that taking 1% of the interest rate?

Jenn did you find a house?

Re: Buying Points

You pay points (1% of the amount you financed per point) to lower the rate. Each point usually lowers the rate about 1/8 to 1/4 % (usually 1/8%). Over the long run, it will save you $$$ so its good if you plan on staying in the house.

Re: Buying Points

when you buy a point you are lowering the interest rate.

there are many factors involved to figure out if its worth it (how long you plan on staying in the house, etc)

there are calculators online (if you want to FM me some stats I can do it for you if you want)

Re: Buying Points

thanks everyone

Re: Buying Points

Message edited 1/30/2009 2:26:47 PM.

Re: Buying Points

I think DH are going to do this. when we FINALLY buy a house, we'll be in it long enough to re-coup what we spent to buy a better rate.