Mortgage Interest Rates.

Interest rates.
According to Freddie Mac, mortgage interest rates remain low, as that the economy is still stressed due to the pandemic. As interest rates remain under three percent, it is wise to buy or refinance your home (before the rates rise).

Points.

When you are quoted a rate (say, 2.75%) it may only be available if you pay points (say, .07%). Why is this? Points are short for "discount points"; points are a fee paid to the lender at closing to reduce the interest rate on your loan. Typically, one point costs 1% of your mortgage amount. Essentially, you are prepaying a portion of interest to obtain a lower rate.

Breaking even.

The longer you stay in your home, the more likely you are to “break even” or recoup the cost of buying points. You can divide the cost of the points by how much you save on your monthly payment. For instance, if you buy two points for $4,000. The monthly savings to you is $58.54 (I know, I promised there would be no math ;). Yet, in this case, it would take you 68 months, or 5.7 years, to "break even".

Are points wise?

If you plan to stay in your home for under six years, buying points are unwise. You are better off spending that money on your down payment.

Finally, please consult your lender for specific advice!