What Are Discount Points?

By
Real Estate Agent with JP & Associates REALTORS® 0615028

A type of prepaid interest mortgage borrowers can purchase that lowers the amount of interest they will have to pay on subsequent payments. Each discount point generally costs 1% of the total loan amount and depending on the borrower, each point lowers your interest rate by one-eighth to one one-quarter of your interest rate. Discount points are tax deductible only for the year in which they were paid.

For more information please watch the short video below :

 

 

Comments (1)

Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Nick, sometimes worth it, sometimes not! Many variables to consider! Enjoy your day!

Jul 29, 2014 08:33 PM

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