Lender Outlook - May 2022
Posted by Kissinger Bigatel & Brower REALTORS on Wednesday, May 25, 2022 at 1:37 PM
By Kissinger Bigatel & Brower REALTORS / May 25, 2022
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Lender Outlook - May 2022
Over the last six months, interest rates have risen sharply. We’re often asked if paying points to lower the interest rate is a good idea.
What are points?
Mortgage Points are fees that the borrower can pay in order to lower the interest rate. One point is 1% of the loan amount and generally reduces the interest rate by .25%. With a loan amount of $300,000, 1% would cost $3,000 and if the interest rate was 5%, it would be reduced to 4.75% by paying points.
For a $300,000 loan amount at a 30-year fixed rate mortgage, below is a breakdown of how much interest the borrower would pay over the 30-year life of the loan. And, the difference in monthly payment.
Interest Rate |
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