06/19/2024
🙌 Let’s break this down a bit more:
When you purchase points, you’re actually lowering your interest rate. Just like this:
✔️ Buying 1 point cuts your rate by 0.25%.
✔️ And each point costs you 1% of your total loan amount.
Let me give you an example: Instead of offering, say, $390K on a $400K home, consider proposing the full price but request $10K back for a concession for buying down your rate. if you go for 2.5 points, that’ll set you back about $10,000, but check out the benefits:
✔️ Your interest rate drops from 7% to 6.38%.
✔️ This change reduces your monthly payment from $2,661 down to $2,497
Remember, this doesn’t include taxes and insurance, but you’re still saving about $164 a month!
That’s real money staying right in your pocket. Curious to see how it all adds up for your situation? Search for a “mortgage points calculator” online and crunch those numbers for yourself. You might be surprised at the savings!
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