Home | Sitemap
 Advertising: Laying Your Cards on the Table 

Successful marketing is not really measured in how many customers you were able to sell today. To be really able to say that you have a great marketing strategy is to be able to know that your customers were happy and satisfied with their purchase and that they were able to get their money's worth.

[Read more]

Articles

Understanding Points in Home Mortgages

If you are in the market for a mortgage to buy a house you've no doubt heard the term "points" being thrown about. No, they aren't talking about the score from last night's NFL game; they are actually talking about a fee that is paid to the lender of the mortgage you are taking out to buy your home. Points can have impact on your mortgage, both positive and negative, so being informed about how they can help and hurt you is crucial when determining if a mortgage loan is the right fit for you.

In the simplest form, points are a onetime fee that is paid to a lender and are used to secure a loan below the current market interest rate. Each point represents 1% of the mortgage amount. So if you have a mortgage for $150,000 then one point would be equal to $1,500. A seller would pay points on a loan to reduce the interest rate of the loan which could potentially save them much more than the points cost up front over the life of the loan.

Points are not always paid for by the buyer; they can sometimes be paid by the seller as well. A seller would typically pay for points when they are in a rush to sell the property or have been having a hard time finding buyers for the property. In this case it is used as an incentive to get the buyer to move on the property. There are times when it may not be in your best interest to purchase points. A rather simple way of doing this is to determine the payback period, or length of time it takes you to pay back the points you purchased up front. First, determine your monthly payment amount without points, and then with points.

If you are paying $900 without points and $800 with points, your monthly savings is $100. Now take the total cost of the points, say 2 points on a $150,000 mortgage which would be $3,000, and divide the cost by the monthly savings. $3000/100 = 30 months. It will take you 30 months to realize your savings of $100 per month. For a 30 year loan, it would make a lot of financial sense to purchase the 2 points up front if you can afford them.

Where you have to be careful with points is when you don't plan to be in your current home long enough to reach the payoff. You also have to keep in mind that the cost for points is above and beyond your down payment on the house you want to purchase as well. It can add significant up-front costs, which is why it is a wise move only if you plan on occupying the house for a long period of time and have significant cash up front to be able to afford it. One final note about points - they are tax deductible as they are considered prepaid interest. They are deductible by the buyer, even if the seller pays for them.

Points are deductible fully in the year they are paid for a new purchase, and over the life of a loan for a refinance.

Susan Duey represents, Home Refinance Empire offering low home loan refinance rate marketplace which connects consumers with multiple companies that compete for their business. For more information please visit Understanding Points in Home Mortgages



Advertising






West Austin TX Subdivision Profile Commanders Point - Driving down RR 620 near the Mansfield Dam, along Lake Travis, you will come across a neighborhood of homes that although small in total size has much to offer.

Real estate loan - Real estate loan: Understanding the concept.

Online Trading Should You be a Trader or Investor - Millions of people invest in the stock market and many have thought about becoming a trader.

The Truth Behind Stock Market Trading - If you happen to watch a business show or business news on TV, you'd probably hear words or phrases like "stock market," 'trading," "stocks" or "stock market trading.

Retirement Income Opportunity - Read about a retirement income opportunity that is right in front of your eyes is waiting for you to learn about it.

more...
©Copyright 2024 Gbsminteractive.com. All rights reserved.
Unauthorized duplication in part or whole strictly prohibited by international copyright law.