What’s the Point with Mortgage Points in El Paso, Texas?

Recognized as one of USA’s ‘best performing cities’, El Paso, Texas is an ideal place for you if you are looking for mortgage deals that do not bankrupt you down the line. However, for this to be possible, you must know how to make use of mortgage points. The following data offers a bird’s eye view of this system:

What are Mortgage Points?

Mortgage points are divided into two categories you can opt for according to yout specific financial situation. Commonly known as origination points and discount points, each encapsulates 1% of the entire mortgage loan. For instance, if a home is worth $100,000 a single point will equal $1,000.

Typically, these points are used to compensate loan officers and not all mortgage personnel need to be paid for them. However, those who are willing to do so are also typically willing to negotiate charges. Plus, origination points are not susceptible to taxes.

Discount points refer to prepaid interest which can be lowered (by approximately 0.25%) as each point is purchased. Depending on the lender, you can sell from one to three discount points at a time. Advertised rates are also based on purchased points. Plus, if you decide to itemize taxes, the points that are discounted will be susceptible to tax deductions on Schedule A.

Before getting into any deal with a lender, you need to make sure you have your facts straight regarding purchase points. Once that’s done, paying off the monthly mortgage amount will not be a problem.

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