STAY ON “POINT” WITH YOUR MORTGAGE RATE DETAILS
Make sure that you are not afraid to look into “paying a point” when it comes right down to locking in a mortgage rate. Do not miss the “point” and just accept the rate offered initially, Jeff Jenson of The Federal Savings Bank has made the suggestion that discussing paying down a point or a percentage of a point with your Mortgage Broker can be financially worthwhile.
Jeff states that in his experience, many times home buyers are quoted an interest rate and just accept it as the only option. Historically banks have offered a lower rate for a paying a point (which is 1% of the loan amount) upfront at the closing. This is referred to as “buying down the rate”. Sometimes, however, depending on the price point of the rate, borrowers can receive a 125% reduction in their rate for much less than a full point.
MAKE SURE YOU ASK THE RIGHT QUESTIONS!
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