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Ask Shop Rate: Greg - Florida


  Shoprate.com
I am looking to buy my second house. I have noticed that you can get a lower mortgage if you pay points. This leads me to my question, what exactly is a point? A point (also know as a discount point) is basically a way of buying down the interest rate you will receive. They are a one-time payment made at the time of the origination of the loan. One point is equal to one percent of the mortgage amount. Ask the lender to quote the points in dollars ahead of time so you will know how much money upfront you will have to pay to receive a certain rate.

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