Mortgage Discount Points Sedona 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.

First Magnus Financial Corp
(928) 203-9899
1225 W Highway 89A Ste 201B
Sedona, AZ
 
U S Capital Mortgage
(928) 204-0019
1370 West Highway 89A
SEDONA, AZ
Services
Mortgage Brokers

Concord Mortgage Company
(928) 203-4373
2530 West Highway 89A
SEDONA, AZ
Services
Mortgage Brokers

Chase Bank
(928) 282-4127
1300 W Hwy 89a
Sedona, AZ
Type
Freestanding
Office Hours
Mon:9:00-5:00
Tues:9:00-5:00
Wed:9:00-5:00
Thurs:9:00-5:00
Fri:9:00-6:00
Sat:9:00-1:00
Sun:closed

American Mortgage Specialists Inc
(928) 282-4474
1725 West Highway 89A
SEDONA, AZ
Services
Mortgage Brokers

Concord Mortgage Company
(520) 203-9494
2530 W. Highway 89A
Sedona, AZ
 
Pinnacle Capital Mortgage Corporation
(928) 282-3200
1865 W Hwy 89A Ste D
Sedona, AZ
 
Primary Residential Mortgage Inc
(928) 203-0695
3190 W State Route 89A Ste 900
Sedona, AZ
 
National Bank of Arizona
(928) 204-1060
1470 West Highway 89A
SEDONA, AZ
Services
Mortgage Brokers

M And I Marshall Isley Bank
(928) 203-4484
2030 West Highway 89a
Sedona, AZ
 

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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