{"id":17780,"date":"2020-09-10T12:17:58","date_gmt":"2020-09-10T12:17:58","guid":{"rendered":"http:\/\/www.anthonydidonato.net\/wordpress\/?p=17780"},"modified":"2020-09-10T12:17:58","modified_gmt":"2020-09-10T12:17:58","slug":"should-buyers-pay-points-on-a-mortgage","status":"publish","type":"post","link":"https:\/\/www.anthonydidonato.net\/wordpress\/should-buyers-pay-points-on-a-mortgage\/","title":{"rendered":"Should Buyers Pay Points on a Mortgage?"},"content":{"rendered":"

Should Buyers Pay Points on a Mortgage?<\/h1>\n
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Mortgage borrowers often have a choice to pay more up front in points to get an interest rate reduction or save money and accept a higher rate. It\u2019s a choice that more buyers are considering, particularly jumbo borrowers\u2014those who borrow more than $510,400 in most locales.<\/p>\n

High balance and jumbo borrowers have been paying more in points than they did prior to the pandemic, according to an analysis by Optimal Blue, a mortgage technology and data company.<\/p>\n

\u201cJumbo borrowers are paying more discount points to lock in a historically low rate at the lowest available level,\u201d Rick Allen, vice president of business transformation for Optimal Blue, told The Wall Street Journal.<\/p>\n

Reportedly, more mortgage lenders are also offering borrowers an unusually large per-point reduction on the rate, according to The Wall Street Journal. For example, WSJ\u00a0reports on\u00a0a borrower who was able to get a 2.75% rate on a\u00a0loan for $584,000 in mid-August. The\u00a0borrower paid half a point\u20140.5% of the total loan amount\u2014or $2,920. Their next choice for a loan without paying points was 3.375%.<\/p>\n

Not all loans offer these types of rate reductions with points. Many\u00a0loans offer the traditional one point per 0.25% rate reduction.<\/p>\n

United Wholesale Mortgage recently made headlines when it introduced a 30-year fixed-rate loan that can be paid down with points to a 1.99% rate. Without points, that loan would have a rate of about 2.5%, although that can vary among borrowers.<\/p>\n

Better.com, an online lender, reports borrowers paying points on their loans is about 40% higher than it was between March through August of last year. He says many clients were locking in a 2%, 30-year fixed-rate mortgage in August by\u00a0paying 5 points to do so. Without paying points, their rate likely would have been about 3.125% instead.<\/p>\n

Borrowers should carefully weigh the decision when choosing to pay points\u00a0to lower\u00a0the\u00a0interest rate. Borrowers will need to identify their break-even point between two mortgages with different rates and points. Online mortgage-points calculators could be used to help, such as mtgprofessor.com<\/a>. Many financial experts say paying discount points makes a lot of sense if the break-even date comes within two years. A break-even point of three and four years is also likely worth considering.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Source:<\/div>\n
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\u201cJumbo Mortgage Borrowers Are Paying Discount Points Again. Here\u2019s Why<\/a>,\u201d The Wall Street Journal (Sept. 3, 2020) [Log-in required.]<\/div>\n
\u00a9National Association of REALTORS\u00ae
\nReprinted with permission<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Should Buyers Pay Points on a Mortgage? Mortgage borrowers often have a choice to pay more up front in points to get an interest rate reduction or save money and accept a higher rate. It\u2019s a choice that more buyers are considering, particularly jumbo borrowers\u2014those who borrow more than $510,400 in most locales. High balance … <\/p>\n

Continue reading<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,8],"tags":[5,32,4,9],"class_list":["post-17780","post","type-post","status-publish","format-standard","hentry","category-news","category-real-estate-tips","tag-anthony-didonato","tag-news","tag-real-estate","tag-tips","item-wrap"],"yoast_head":"\nShould Buyers Pay Points on a Mortgage? - Real Estate Agent and Sales in PA - Anthony DiDonato Broomall, Media, Delaware County and surrounding areas in Pennsylvania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.anthonydidonato.net\/wordpress\/should-buyers-pay-points-on-a-mortgage\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/should-buyers-pay-points-on-a-mortgage\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/should-buyers-pay-points-on-a-mortgage\\\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"headline\":\"Should Buyers Pay Points on a Mortgage?\",\"datePublished\":\"2020-09-10T12:17:58+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/should-buyers-pay-points-on-a-mortgage\\\/\"},\"wordCount\":408,\"publisher\":{\"@id\":\"http:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/#\\\/schema\\\/person\\\/964792b6994e8cc4cbddc36ad4824908\"},\"keywords\":[\"Anthony DiDonato\",\"News\",\"Real Estate\",\"tips\"],\"articleSection\":[\"News\",\"Real Estate Tips\"],\"inLanguage\":\"en-US\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/should-buyers-pay-points-on-a-mortgage\\\/\",\"url\":\"https:\\\/\\\/www.anthonydidonato.net\\\/wordpress\\\/should-buyers-pay-points-on-a-mortgage\\\/\",\"name\":\"Should Buyers Pay Points on a Mortgage? 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