By buying points can you get a better rate?

Are you planning on keeping your loan for a while? Then it may make sense to "buy" a lower interest rate by paying one or more "points."

Even if you are unsure of how long you plan to keep your mortgage before you move or refinance, paying points now for a lower rate may make sense.  We can give you the information you need to help you make this decision.  Our goal is to find the right loan program for your specific needs at the lowest total costs.

A point -- which equals one percent (1%) of the total loan amount -- is a front end fee that lowers your annual interest rate and total interest due over the life of your loan. So, by paying a point or a fraction of a point you can buy a lower rate.  Basically, when you pay points, you trade off paying money later in favor of paying money now. Over time this can save you a lot of money!  Often times point costs can be financed as part of the closing costs or part of the seller's closing costs. 

There are a variety of rate and point combinations available.  When you look at different loan programs, don't look just at the rate -- compare the whole package.  Federal law requires lenders to publish their loans' Annual Percentage Rate, or A.P.R.  The A.P.R. is a tool used to compare different terms, offered rates, and points.