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What are points and why do some mortgage options require them?
Points can be paid on a mortgage up front at closing to buy down the interest rate, however, if you don't have enough cash available for closing, this may not be an option. Less points means less money up front for closing. A word of caution -- some lenders advertise very low interest rates, though on further examination you may discover that this is contingent on you paying one, two or three points upfront at closing. Remember, one point can be up to 1% of the loan amount. |