What should I know about buying points?

Buying points means paying upfront to reduce your interest rate. It is a tradeoff between upfront cost and long-term savings.

How do points work?

Each point typically costs 1% of the loan amount and lowers your rate.

When does it make sense?

If you plan to keep the loan long enough to recover the upfront cost.

How do I evaluate it?

Calculate the break-even point between upfront cost and monthly savings.

Does it help in competitive offers?

Not directly, but it can improve your long-term payment.

Are there risks?

If you sell or refinance early, you may not recover the cost