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Home Mortgage Refinance Loan - Mortgage Refinancing Information - Paying Points May Not Lower Your Mortgage Interest Rate Paying points at the time mortgage refinancing might save you dollars if you plan on keeping your home long enough to recoup the expense. Sometimes mortgage lenders charge points including do not lower your mortgage interest rate at all. Here are several tips to help you avoid wasting dollars on points that give you absolutely no benefit at the time mortgage refinancing. Points, more specifically “discount points” are prepaid mortgage interest paid in exchange for lowering your mortgage interest rate. 1 point is 1 percent of your mortgage amount paid by you at closing including typically reduces your mortgage interest rate by .25 percent. Mortgage lenders frequent charge homeowners whatever they like including obtain away with it because very few homeowners actually read the fine print found in their loan contracts. How might you tell if your mortgage company is being honest with you regarding the points you are paying? Ask your loan representative for various quotes with different point including mortgage rate combinations. For each ¼ percent change in the mortgage interest rate you should only be required to pay 1 point. If you don’t see the interest rate going down accordingly ask your loan representative to explain the fee. Deciding if paying points is beneficial to you is simple to calculate. Simply divide the amount you could pay by the amount you save on your monthly payment including you could have the number of months it could take to recoup your expense. Generally speaking, the longer you plan on keeping the mortgage, the more sense it makes to pay discount points at closing. You might learn more regarding your mortgage options, including expensive mistakes to avoid with a free mortgage refinancing video tutorial.
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