Will mortgage points help when buying a home in New York City?

What do ‘mortgage points’ mean?

The short answer is it’s a form of prepaid interest you can elect to pay up front in exchange for a lower interest rate and monthly payments. Buying mortgage points is when a homebuyer chooses to pay interest up front in exchange for a lower interest rate over the life of the loan.

Why should you consider mortgage points? How do they help? Let me explain how they could help. One point is equal to one percent of the principal amount of a home loan. If a mortgage is $500K, on point, to be paid at closing, equals $5,000. The more points that you pay the lower the rate.

As you mortgage shop to select the broker and loan officer you feel most confident with, I want you to keep in mind that competitors may be charging you mortgage points to get to the lower rate. One lender could offer a rate of 4.25% but charge you two points. Another lender could offer you a higher rate with a zero-point option.

My suggestion is to not jump to conclusions and really think about the loan officer who has the experience and the means to guide you correctly. Give the loan officer a call and see if they know their rates with and without mortgage points. Quite frankly, it should be second nature to them.

Analyze the rates, APRs, and points that the loan officer quotes you. If you make your decision only based on the interest rate that could cost you extra money down the line.

Email or call me to talk and I’d be happy to give you a recommendation.

Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee. Restrictions may apply.

Equal Housing Lender, Brian Scott Cohen NMLS ID: 410025; OriginPoint LLC fka Guaranteed Rate Affinity, LLC (“OriginPoint”) NMLS 1598647; For licensing information visit nmlsconsumeraccess.org. Operating in the state of New York as OriginPoint LLC fka GR Affinity, LLC. Operating in the state of California as OriginPoint Lending LLC fka Guaranteed Rate Affinity, LLC.

Information provided is for educational purposes only. It should not be construed as financial or legal advice or instruction. OriginPoint does not guarantee or assume liability for the accuracy, completeness or timeliness of the information. You should conduct additional research before making any mortgage related decisions.

*not advertised rates from OriginPoint