Mortgage Broker Company - Paying Points

To avoid wasting money on points that will not benefit you when you are refinancing your mortgage here are a couple of tips.

Points are prepaid mortgage interest paid in exchange for lowering the interest rate. A point is 1% of your mortgage amount. Typically it can reduce your interest rate by .25%.

Ask for different point and mortgage rate combination quotes. Divide the amount you pay by the amount you save on your monthly payment and you will get the number of months it will take to get back your expense.

The longer you keep your mortgage the more sense it makes to pay for discount points at closing.