3 ms·
One of the strangest parts about mortgages to me is the "point" system lenders use to sell buyers lower interest rates. They offer a lower interest rate if you
by deckar01 8y ago
One of the strangest parts about mortgages to me is the "point" system lenders use to sell buyers lower interest rates. They offer a lower interest rate if you "buy points" rather than applying it towards your down payment. It seems like lenders are prioritizing their short term profit over their customers' long term financial stability.
- jiveturkey 8y agoWhy is this strange? The majority of lenders repackage and sell off loans that they originate. Of course they are prioritizing short term profit. As for buyers, also what's not to love? Buying points gets you more cash flow than the reduced principal. There's some math to do, and some financial projection, where you expect to be in 5 years, etc. It's great to have the option.