The things you need to know about lender points.
Quotes:
"As you consider your loan options, you really need to look at your long term ownership plan as well as your willingness to actually pay points and that will really help you determine the best strategies so you can consult with a mortgage professional on this and they can give you some scenarios to look at."
Show Notes:
[00:03] We're talking lender points. These are mortgage points. What are they in? Should you pay them?
[01:01] Lenders make money on loans in basically two ways. One is via the interest rate they charge. The higher the interest rate, the more money that they make when they sell the loan after it closes which typically happens. The other way they make money is to charge fees.
[02:44] It may be okay to pay some points when you start looking at the lower interest rate that you may get and the fact that you're going to be in that home for a longer period of time. Maybe if you're going to be short term in a residence, then paying a point may not be beneficial.
[03:43] Ultimately it's up to you, but that is what the professional is for. It's to give you the advice that you need and then help you make the right decision for yourself.
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