Oct
4
2006

to point or not to point

A real estate chat on washingtonpost.com today offered the most common-sense formula I’ve seen for judging whether paying a certain number of points on a mortgage is worth it, depending on how long you plan to live in the home:

Suppose, for example, that by paying a $1,000 loan orgination fee you can lower your monthly payment $25. Divide $1,000 by $25 = 40 months. If you keep the loan more than 40 months, it’s wise to pay the points.

(washingtonpost.com: “Home Buying Basics” - 10/04/2006)

I’ve been relying on points calculators, not realizing just how simple the formula is.

In related news … It’s nine days and counting until we close on our condo. Yikes!

Tags:
Posted at 2:41 PM in business and money

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