Buy Down Points Mortgage Access

: Using your last bit of cash for points instead of keeping it as an emergency fund can be risky. How to Calculate the Break-Even Point

: It is a strong financial move if you plan to keep the loan long enough to reach the "break-even point" . This is when the monthly savings from the lower rate finally exceed the initial cost of the points. buy down points mortgage

: If you plan to sell the home or refinance within a few years, you likely won't reach the break-even point, meaning you’ve wasted the upfront fee. : Using your last bit of cash for

: Find the difference between the monthly payment at the higher rate and the lower rate. : If you plan to sell the home

To determine if a buy-down is right for you, follow these steps: : Calculate 1% of your loan amount per point.

Example : Paying $4,000 to save $100/month means your break-even point is (3.3 years). Comparison Table (Sample $500,000 Loan) Interest Rate Upfront Fee Monthly Payment Monthly Savings Break-Even Time ~60 months ~60 months Data based on estimates from PenFed Credit Union . What Are Mortgage Points And How Do They Work? - Bankrate