Mortgage points can offer meaningful savings, but only under the right circumstances. For some borrowers, the upfront cost makes sense. This is because they plan to stay in their home long enough to benefit from lower interest payments over time. For others, especially those who are unsure about how long they’ll hold their mortgage, the extra expense might not be worth it.
As a mortgage broker, you must guide your clients in weighing their options based on both short-term cash flow and long-term goals. You’ll need to explain how buying points affects not just monthly payments but also the total cost of the mortgage over its full term. Many borrowers won’t understand the trade-off without your guidance.
In most cases, your clients might just want reassurance that they’re not missing out on a good deal or overpaying where they don’t have to. That’s where your communication skills and mortgage knowledge can make a lasting impact.
Mortgage points are a way to get around the interest rate hikes that your clients might be facing. If their mortgage interest rate is going up a considerable amount, it might be worth looking at using mortgage points to buy down their interest rate.
Do you have clients who are interested in buying mortgage points? What tips would you give them? Let us know in the comments belo