Hello! This is Joe Harris with Morgan Financial and here is your “Joe Knows Mortgages MINUTE”. This week, we answer the question: “What are points and when do you pay them?”

Points are fees that a borrower pays directly to their lender at their closing, in exchange for a lower interest rate. 1 point is 1% of the mortgage amount. As a rule of thumb, 1 point will typically decrease your interest rate around ¼ of a percent. Paying points is also known as “buying down the rate.”

While many people tell us “I don’t like to pay points”, we look at the math. At Morgan Financial we will do a cost benefit analysis to determine if the cost of buying down the interest rate is worth it to our clients in the reduction of payment.

Thank you for tuning into this Joe Knows Mortgages MINUTE If you have any home loan related questions, we want to hear from you! So please comment down below! Also, please feel free to like and share this information with your family and friends. See you again next Monday!

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