In the last blog post, Refinancing, we mentioned paid points as a cost of refinancing. According to The Truth About Mortgage, “Many borrowers and prospective homeowners out there are looking for the lowest possible interest rate, even if it means pulling money out of their pocket at the time of financing.” They are looking at buying down the rate or buying mortgage points or paid points.
“Though most borrowers usually opt for a higher mortgage rate to avoid paying closing costs when buying a home or refinancing, some savvy homeowners will pay the one-time fees and take a lower interest rate to save money over the long term.
Of course, this strategy only really makes sense if you plan to stay with the mortgage for a long period.”
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