Home Loans
New Mexico Mortgage: Should You Pay Points for a Lower Interest Rate?
(presented by www.refinance-refinance.net - mortgage lenders)
By Louie Latour
The benefits of paying points are not the same for every New Mexico Mortgage. Some homeowners save thousands of dollars on their New Mexico Mortgage by paying a point or two and others pay this fee without benefit. How do you know if paying points is right for you? Here are several tips to help you decide if paying points on your New Mexico Mortgage is right for you.
What are Discount & Origination Points?
There are two varieties of points that come with your New Mexico Mortgage. There are origination points you pay to the mortgage company or broker that originates your loan, and discount points you pay to the lender in exchange for more favorable terms or a lower interest rate. In both cases, one point is equal to 1% of your loan amount. You can reasonably expect to pay between 1-1.5 origination points and depending on your credit and the type of New Mexico Mortgage you choose, a point or two in discount points. If the lender is not requiring that you pay discount points to qualify for the New Mexico Mortgage you should consider paying discount points when negotiating for better terms or a lower interest rate.
Why Pay Points for Your New Mexico Mortgage?
If you have the cash on hand and do a proper cost vs. savings analysis, you might find paying a point or two for a lower interest rate on your New Mexico Mortgage is beneficial. Paying one point typically lowers your interest rate by .25%. If you plan on staying in your home for a long time you will be able to recoup this expense from the lower monthly payment amount. Again, you need to look at how much lower your monthly payment will be using a simple mortgage calculator and how long it will take you to recoup the expense before you commit to paying points. If you decide to buy down the interest rate on your New Mexico mortgage by paying this fee, in addition to a lower interest rate you gain a deduction on your Federal Income tax.
Discount Points May Not Be Right for Every New Mexico Mortgage.
If you en!
ling the home before recouping your expenses you will lose money by paying points on your New Mexico Mortgage. If there is any chance of moving for several years you will not want to negotiate with the lender using discount points for your New Mexico Mortgage. You can learn more about refinancing your New Mexico mortgage including costly mistakes to avoid by registering for a free mortgage guidebook.
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To get your free mortgage guidebook visit RefiAdvisor.com using the link below. Louie Latour specializes in showing homeowners how to avoid costly mortgage mistakes and predatory lenders. For a free copy of “Mortgage Refinancing - What You Need to Know,” which teaches strategies to find the best mortgage and save thousands of dollars in the process, visit Refiadvisor.com. Claim your free mortgage refinance information guide today at: http://www.refiadvisor.com |
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