Discount points, also known as mortgage points or loan points, are a common feature in the real estate market. They represent a way for home buyers to reduce their monthly mortgage payments in exchange for paying a lump sum upfront during closing.
This practice has been around for decades and offers advantages such as lower interest rates over the life of the loan. Understanding how to calculate discount points empowers homebuyers to make informed decisions about their mortgage financing. In this article, we will delve into the intricacies of discount point calculations to equip you with the knowledge and tools you need to navigate the real estate market.