Mortgage Discount Points Flagstaff AZ

There are many expenses one must pay when closing on a mortgage. This article talks about how discount points can help ease the burden.

State Mortgage LLC
(928) 213-9959
5200 E Courtland Boulevard
Flagstaff, AZ
 
Pacific Coast Mortgage Inc
(928) 213-0569
3190 S Debbie St
Flagstaff, AZ
 
Moria Development Inc
(520) 556-9524
403 North Humphreys
Flagstaff, AZ
 
Wallick And Volk Inc
(800) 280-8655
320 N Leroux St Ste A
Flagstaff, AZ
 
Gateway Business Bank
(928) 527-7974
5200 E Cortland Blvd Ste B6
Flagstaff, AZ
 
First Magnus Financial Corp
(928) 774-3171
2380 N Oakmont Dr Ste 1
Flagstaff, AZ
 
Home123 Corporation
(928) 226-8266
1300 W University Ave Ste 100
Flagstaff, AZ
 
Countrywide Home Loans Inc
(928) 774-9088
2 S Beaver St Ste 230
Flagstaff, AZ
 
Wells Fargo - East Flagstaff
(928) 556-9872
2625 N 4Th St
Flagstaff, AZ
Type
Branch
Office Hours
Mon-Fri 08:00 AM-06:00 PM
Sat 09:00 AM-04:00 PM
Sun Closed

Bank Of America
(520) 526-2574
4550 N Highway 89
FLAGSTAFF, AZ
Services
Mortgage Brokers

Mortgage Discount Points

Discount points are a fee paid to the lender in order to reduce the interest rate on the mortgage. A "point" is one percent of the loan amount; in exchange for paying one or more points, the interest rate on the mortgage may be reduced by an agreed upon amount. Since this fee can easily run in the thousands of dollars, it would make sense to first determine if it is a good idea to pay the lender to reduce the interest rate.

The key to this equation consists of two parts – how much the monthly payment will be reduced if you pay the points and how long you will keep the mortgage. Most people have some notion of how long they intend to remain in the house they are buying, but it is more difficult to determine how loan you will keep the loan. After all, if interest rates drop dramatically, you may elect to refinance the mortgage, which would retire the existing one.

When closing approaches, and you are considering "locking in" your interest rate, ask your lender if you can reduce the rate by paying points. After he or she outlines the available options, ask them how much the monthly payment would be reduced if you paid the points. After that, divide the cost in points by the monthly savings. The answer will be the number of months that you will have t keep the loan to break even. If you think you will keep the mortgage for that long or longer, then you should probably pay to reduce the interest rate if you can afford to do so.

Even a savings of $20-30 per month can add up over the life of a 30 year mortgage, so it is well worth your while to see if you can lower the payments. Why pay more than you have to?

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