If you’re trying to cook healthier meals at home, you’re probably already stocked with olive oil. But this healthy fat, popular in the Mediterranean diet, is only healthy in moderation—and it can be hard to tell just how much you need when pouring straight from the bottle. That’s where this oil sprayer comes in.
Mortgage rates have hit record-setting lows time and time again in 2020, offering Americans a chance to save big when either buying a home or refinancing their existing one.
Those bargain-basement rates aren’t available to just anyone, though. The lowest rates are usually reserved for borrowers with the best credit. So increasing your credit score? That can help your case a lot. Because rates vary from one lender to the next, so can shopping around for your mortgage company.
If you’re willing to do some careful calculations, there’s also a third, lesser-known way to snag a low interest rate and save cash over the long haul: Buy mortgage points.
What are mortgage points?
When you apply for a home loan, you’ll have the opportunity to buy mortgage points. Each point costs 1% of your loan amount and lowers your interest by a small, fractional amount.
“Mortgage points — or discount points — allow you to pay more in closing costs in exchange for a lower mortgage rate,” says Lucy Randall, director of sales at mortgage lender Better.com. “That means you’ll have a bigger upfront fee, but a lower monthly payment over the life of your loan.”
Many people call paying points “buying down your rate.” The exact amount that a point can lower your rate varies, depending on your loan, lender and the overall investment market. Usually, it’s anywhere from one-eighth to one-quarter of a percent, Randall says.
Here’s an example of points in action: Say you were quoted a 3.5% interest rate on your $200,000 loan but were really hoping for a 3% rate. Points could help you achieve that.
According to your lender, a point is currently worth 0.25. That means to lower your rate by 0.50, you’d need to