Discount points are a one-time fee that lowers your mortgage interest rate over the life of your loan.
You may have heard this referred to as “buying down the rate” or “pre-paid interest”. Discount points lower your monthly mortgage payment. The advantage of discount points depends on how long you plan to stay in your home.
When reviewing rates, be sure you ask if the rate includes discount points. Many rates today are advertised including discount points.
Eight First-Time Home Buying Mistakes to Avoid
Buying discount points without considering how long you will stay in the home is a buying mistake you want to avoid. Review a complete list of mistakes to avoid when purchasing your first home in this helpful guide for the road to home ownership from BALANCE, a financial education and counseling service that can help you get your finances in order, pay down your debt and reach your goals – all at no cost if you’re a Peach State member!