Should I Pay Points?

You can choose to pay discount points up front to reduce or discount your interest rate. Paying more up front will reduce your monthly payments and your interest expense over the life of the loan. The longer you plan to stay in your home, the more this might be a financially sound plan.

Things to consider:

How much can I afford to pay up front?
Who is paying the points? - If your employer, seller and/or contractor are paying points, let them, it is to your benefit.
How long do you intend to live in the property? I you are anticipating a short ownership (3 to 5 years) it may not be cost effective to pay points.
Are there any tax advantages? Points may be tax deductible - consult your tax advisor for guidance.