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Why Pay Points on a Mortgage?

When you take out a mortgage, you can lower the interest rate on the loan by purchasing points. One point is equal to 1 percent of the loan value. So, for example, on a $200,000 mortgage, 1 point would cost you $2,000, 2 points $4,000. Generally speaking, each point you pay upfront will decrease your interest rate over the life of the loan by about one-quarter of one percent. Read More

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