What Do Points Have to Do With Woodbridge (Middlesex County, NJ) Real Estate?

By
Real Estate Agent with Metuchen Keller Williams Elite Realty / Middlesex County, NJ

You may have heard of points when looking for Woodbridge real estate.  Maybe your loan officer told you that you can trade points for a better interest rate.  That sounds good, but just what are points? Let me give you a better idea of just what points are and how they work.

What Are Points?
Points, more specifically discount points, are a percentage of the total loan amount for the house that is pre-paid to the lender.  Each point is worth one percent.  Your lender may offer a lower interest rate for your mortgage loan if you buy discount points.

What do Discount Points Cost?
The cost of each point is equal to one percent of the loan amount. For instance, for a $200,000 loan one discount point equals $2,000.

For example, you are trying to buy Woodbridge real estate worth $200,000.  The lender may tell you that if you buy 2 points at $2,000 each, you'll get an interest rate two percent better. 

Financing your home in Woodbridge, New Jersey.
Should I Buy Discount Points?

Some lenders will allow you to purchase discount points to be approved for the loan.  By buying a discount point, you'll get a lower interest rate.  This can reduce your monthly payments, which could put your credit to debt ratio in the right range.
 
You have to know how long you'll live in the house or you could lose money purchasing the discount points.  If you sell or refinance before you reach the break even point, you'll wind up with a net loss.  Use an online mortgage point calculator to help you determine if buying discount points is a money saving proposition for you.

Points may be a good way for you to save money on your Woodbridge real estate if you plan to stay in your home for a long time.  Want one more benefit?  Discount points are tax deductible in the year in which they're paid.

Need help understanding mortgage and real estate terms? Subscribe (RSS) to my blog today! Or Bookmark my main Blog Here. You'll get money saving home maintenance tips and local real estate tips/info/statistics 3 to 4 times a week.

Cathy Chaudemanche
Realtor Associate/Keller Williams Realty
Metuchen, NJ
Servicing Home Buyers and Sellers in Middlesex County, NJ
http://www.YourHouseFast.com

Posted by
Catherine "Cathy" Chaudemanche Team, ABR, SRS, SRES
Local Realtor Associate - Agent Leadership Council
New Jersey Association of Realtors Circle of Excellence Sales Award - 2009, 2010, 2011, 2012, 2013, 2014, 2015, 2016, 2017, 2018
Certified Luxury Home Marketing Specialist
 
Keller Williams Elite Realty 
Cell: 732-616-6700 (preferred)
O: 732-549-1998  EXT 142
Fax: 732-626-7270
 
Local, Full Time, Informed and Involved. When Results really Matter...
close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Lending / Financial
Location:
New Jersey Middlesex County Woodbridge
Tags:
real estate woodbridge
woodbridge new jersey
homes for sale woodbridge
home value woodbridge
home worth woodbridge
woodbridge middlesex

Spam prevention

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
412,479

Catherine Chaudemanche - Edison & Central NJ

Full Time, Informed and Involved- Results Driven
Ask me a question
*
*
*
*

Additional Information