Finding a Home
Financing a Home
Closing on a Home
Mortgage application process
You’ve found the right home. Now it’s time to complete your mortgage application and move through the mortgage application process. If you’ve already prequalified or have received a conditional approval, completing the application process is easy.
You can reduce your interest rate when you "pay for points". One point costs 1% of your mortgage amount. Paying it can reduce your interest rate by about 0.25%. For example: If your mortgage amount is $100,000, one point would cost $1,000 upfront. If you were quoted an interest rate of 4.00%, paying one point would reduce your interest rate to about 3.75%.
Should I pay mortgage points?
Find out if it makes sense to pay mortgage points to lower your interest rate with this interactive calculator. You can estimate your "break-even" timeframe—the point when you'll start to realize a genuine cost savings from your mortgage points.
Paying mortgage points doesn't reduce the amount borrowed—it simply lowers your interest rate and monthly payment.
When should you consider paying points?
The longer you plan to stay in your home, the better it is to pay points. If you plan to move or refinance within the next 2 – 4 years, paying points may not make sense.