You should pay points on a mortgage if you have a relatively low income, but a good lump sum to use to pay for the points. If you can afford more than a 20% deposit, you should use the extra to purchase points rather than reduce you principal sum borrowed.What are mortgage points, and should you pay them?
What are mortgage points, and should you pay them? Discount points. These are actually prepaid interest on the mortgage loan. ... Origination points. This is charged by the lender to cover the costs of making the loan. ... By the numbers .... A lender might offer you a 30-year fixed mortgage of $165,000 at 6 percent interest with no points. ...How do you calculate the points on a mortgage?
Calculate your origination points. For example, if you are obtaining a $200,000 mortgage and you are required to pay 1.5 percent in origination, simply multiply the fractional equivalent of this percentage (0.015) by the total loan amount. In this case your origination is $3,000.