What Are Discount Points—and Should You Use Them?
We get it—mortgage lingo can get confusing fast. One question that pops up often: what are discount points?
In short, discount points (aka “buying down the rate”) give buyers the option to bring more cash to closing in exchange for a lower interest rate.
But here's the catch—while the idea of a lower rate sounds nice, it usually takes 4 to 6 years to break even on that extra upfront cost. So depending on how long you plan to stay in the home or what your financial goals are, it might not be worth it.
Some buyers prefer to lower their monthly payment, while others would rather hold onto their cash upfront. Either way, there’s no one-size-fits-all answer—talking to a Loan Officer at Cream City Mortgage is the best way to figure out what makes the most sense for you.