PLEASE HELP WILL MARK AS BRAINLIEST!!!!! When is it a good idea to purchase discount points on a mortgage? Explain in complete s

Question

Dmitrij [34]

3 years ago

10

PLEASE HELP WILL MARK AS BRAINLIEST!!!!! When is it a good idea to purchase discount points on a mortgage? Explain in complete s

entences.

Mathematics

1 answer:

olganol [36] · Answer 1 · 2022-05-27T10:38:24+03:00

When discount points are paid, the bank collects a one-time fee at closing in exchange a lower mortgage rate to be honored for the life of the loan.

The banks consider this payment to be "prepaid mortgage interest". Meanwhile, mortgage interest is tax-deductible for eligible tax-filers so, for many mortgage borrowers, there's a tax advantage to paying discount points.