1. Pay the Points or Buy Interest
Points are the financing costs for the mortgage lender charges to originate the loan. Paying a point reducing closing costs by one percent of the mortgage value, thus paying one point on a $200,000 home is worth $2,000 in closing costs that may have been otherwise financed into the loan. You can also buy the interest down in a similar fashion, buy paying a point toward the reduction of the loan’s interest rate. This helps the borrower for the life of the loan.
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