FHA Lenders Help You Be a Proud Owner of a Beautiful Nest

Purchasing a nest of one's own is the costliest investment one makes in his life. It is just like coloring one's dream on canvas. But all of the like-to-be homeowners do not have enough finance to fulfill their dream. Some of them procrastinate a lot and can not take decisions if they should apply for a loan. But the FHA lenders understand the needs of the rank and file, take serious note of their financial constraints and play a vital role in making their transitions into a new home a memorable event.

If you are determined enough to approach the FHA lenders, you should take into account some important considerations. First of all, you need to make a precise analysis of your debt to income ratio. This is a vital step as the figure of the ratio will help you have a fair idea of your affordability to buy a property subject to your monthly income and expenses.

Getting pre-approval for a home loan implies that a borrower is inching forward to success. The fact that your mortgage loan as well as credit history are approved by the FHA lender what give you a sigh of relief and peace of mind. Having a prior approval helps you in making an immediate offer if you have found out a suitable property. The seller, having learned that you have already got an approval for the loan, will place greater confidence in you.

Get Rid of Defaulted Student Loans to Avoid Being Harassed

No one wants to default on a borrowed loan, be it home loan, business loan, mortgage loan or student loan. The consequence of defaulted student loans is more bitter than that of other defaulted loans. Students who take loans from the market for higher technical or management education at a renowned institute have a long way ahead to go after they complete studies and qualify. But, the defaulted student loan makes roadblock on their path to a bright and beautiful future life. However, there are ways to get out of the defaulted status.

When you have not made a single monthly payment in a period of 270 days, you default on the student loan. Consequently, the lender will put your loan in the list of defaulted student loans and your name in the list of defaulters. And, your case will be transferred to a collection agency who can go to any extent to collect the loan. There will be no end to harassment, if they call you at irregular hours, haunt you to the workplace and follow you to a social gathering. So, you had better overcome the defaulted status.

Getting rid of defaulted student loans is no Herculean task, if you are a little more conscious. A defaulted loan case is not reported to a collection agency or the credit bureau before 90 days following the period of 270 days when the borrower has not made a payment. If you make a payment within these 90 days, the clouds of your defaulted status will disappear from over your head. You can also go consolidating your student loan during this period. The consolidation option may not be available, in case the 90-day period is over and you do not pay even the smallest chuck of the loan.  

Equity release plan in UK allows the aged to enjoy their twilight days

Equity release plan has helped the citizens of UK a lot to meet the daily needs of day to day life. The monthly expenses for the citizens in UK are growing day by day and it has become almost impossible for the laymen especially the old people to afford their life style and suit themselves in rising expenses. It will not be wrong to say that the aged personalities are almost facing the hardship of their life at this age. It has almost become like a challenge in the retirees to manage this hoax of expenses in their life. The individuals who are retired totally depend up on the amount that they get from their and we all know that how trifle is the amount of pension of the individuals. Therefore they attempt to choose for the Equity release UK.

The schemes for Equity release UK are very beneficial for those who own a house in the country of United Kingdom. The Equity release plans in UK allow the individuals to meet the both end requirements. Equity release plans help the old house owners to release the equity (cash) that is attached to their house or property. For releasing their equity they just need to sell some portion or total of their house in against off that they get a lump sum amount of cash. This lump sum amount of cash is tax free and can be used by the old retired individuals in what so ever ground they wish. This cash is provided to the individuals by the Equity release providers. The old home owners after selling a part of their property or total of it, if wish can also stay in the house and if they need be in that case they can also move out of the place. 

Why Are People Not Buying Homes?

A lot of people in the economic community are wondering if the economy will take a "double-dip" in the latter half of this year. Economic numbers have not been strong to this point. Last quarter's GDP number was revised down and the home sales numbers are heading back down. The expiration of the first time homebuyer credit has not helped the housing market, but not many people chose to take advantage of the program after it was extended.

The reason why people are not buying homes is simply they cannot afford them at today's prices. The combination of the homebuyer credit, low mortgage rates, and low prices made homes affordable for many, and those people purchased homes. There still is a tremendous amount of inventory left in the market, yet the remaining people cannot afford homes at these prices. This means prices have to go lower. Although the government has done a great job supporting the housing market, they cannot continue to do so forever. They have already stopped purchases of mortgage backed securities.

Currently, falling prices have made an excellent opportunity for investors who have purchased homes, condos, and multifamily units and have converted them into rental, income producing properties. The Miami condo market is showing strong signs of recovery as low prices have brought in a wave of all-cash international buyers. Unfortunately, these two groups of individuals are not reliant on the mortgage market for their capital, and would gladly like prices to head lower.

In my opinion, the government will not allow a substantial double dip in home prices, as they will continue to find creative ways to support the housing market. One idea that is being thrown around is relaxing some of the requirements to refinance your loan. Presumably if we have looser requirements for a refinance, people will take advantage to get more money in their pockets. Only time will tell with this and other solutions.

Few basic tips to get best home mortgage loans:

Here are some of the ideas that I came across regarding home mortgage loans. I would like to share these points with you and hope that it will be of some help, specially for those who are looking to purchase a home.

1. The first and foremost thing would be to do proper research and find out the best lender from the lot. There are numerous loan programs and you have to pick the one thats suits your requirements.

2. Though it might sound insignificant, but its true that a good real estate magazine can help you figure out some of the latest offers from the lenders.

3. Next you need to compare the mortgage rates. The low rate can make quite a difference and can allow you save thousands.

4. Another option is internet. You can search in internet and look out for the best finance as nowadays many lenders allow to apply online and it is one of the quickest procedures.

5. If you are new to this field and you think that you dont have much knowledge, then brokers can be a good option for you. This would also save you time and money, and they will also do a lot of research for you.

6. One more important point is if you can increase the principle you are paying at the beginning, it may help you pay less later. And shorter the period, the less amount you need to pay.

These are just some of the basic tips. It will be highly appreciated if you can add to these and share your comments as well.

Save yourself from being neck deep with Apartment loans

Apartment loans are those areas of debt for the apartment constructors who borrow money for creating the various apartments in a locality. The apartments are constructed keeping in mind the locality of the site or plot. Location is the prime factor for construction of an apartment. If the apartment is being constructed in a crowded place or near the market or on main road then the rate of construction or the Apartment loan is much more than the apartments which have been constructed far away from the traffic zone. Another factor which affects the Apartment loan's amount is the type of apartment being constructed.

There are mainly three types of apartments. These include large sized apartments, medium sized apartments and small sized apartments. It is quite obvious now that the Apartment loans for large sized apartments is the more than the medium sized Apartments and more further the Apartment loans for the medium sized apartment is more than the small sized apartments.

The apartments are buildings which may contain one or more than one family who buy the apartment from the contractors. These apartments contain separate or independent kitchen, bathroom, bedroom, drawing room, balcony, etc. if the individual or different family shares anything in common that is the entrance and the terrace. These apartments are constructed in order to accommodate big population under one roof due to scarcity of land. After constructing the apartments with the help Apartment loans; the constructor sells the apartments to these families. The money which the families give to the seller is used by him or her to repay the Apartment loans. A part of income is also kept with him, which is counted as his or her profit. To search out for the Apartment loans, firstly the individuals can look out for different commercial farms, secondly banks and thirdly money lenders.

Vernon Real Estate - your comprehensive guide to the Vernon BC area and homes in Vernon BC for sale in Canada. Our award winning Vernon BC Realtor team can help you!

Don’t Get a Home Loan Until You’ve Raised Your Credit Score

In this day and age, credit has a massive amount of power over how you get to live your life. Your credit rating affects what rate you pay if you buy a car with a note. It also affects whether or not your utilities require you to put down a deposit before they activate. And not only that, but in most cases, a higher credit score is a mandatory part of securing a high paying job. Great credit ranks right up there with your resume and references. But of course, the most obvious benefit of having great credit is being able, not only to buy a home without having to save up enough cash for the purpose, but also to take out an additional loan against the property later on.

A home loan can be a very valuable source of funding for a major project, such as going on to a higher level of schooling. It can also finance the addition of new rooms to the structure, or the building of a garage. A home loan can even be used to purchase (and possibly renovate) a rental property, so as to increase your income and net worth. Over all, when taken in moderation and used responsibly, home loans can be wonderful ways to expand your life… or access emergency cash, if something goes terribly wrong. But of course, like every thing else in your life, it is always best to get a great deal. And equally obviously, having great credit is a major component in proving that you are a low risk to the credit issuer. Here are some great ways to increase your credit score.

The purpose of the credit score (and its attendant system) is to make certain that you are a reasonably low credit risk. And “low credit risk” means “responsible citizen who pays their obligations without being hounded.” If you generally live a responsible life, your credit score will reflect this.

Not every one knows this, but paying your utilities on time actually contributes slightly to having good credit. And while this contribution is very small, it is dwarfed by how much NOT paying your utilities will hurt your credit score. To say nothing of the fact that having a utility turned off could be seriously harmful to your health.

If you have any sorts of loans, pay them. Pay them on time, every month. If you do not pay on your loans, you will be seen as a high default risk. And if you are seen that way, you will only have access to high interest payday loans – which will help your credit score if you pay them properly, but they will cost you greatly.

And do not expect that being perceived by credit issuers as a low risk can be accomplished quickly. A major portion of your credit score is determined by its length. One year is a start. Five years is better. Ten years is when the keys to the kingdom may finally be yours. Do not expect to rush to process, and you will find a GREAT home loan rate.

Hard Money Loans – The Ultimate Investment

The greatest fear for many new Real Estate Investors is where to get money for real estate investing. But this fear has been overcome now by hard money lenders as they give out 100 percent financing with very easy qualifying and fast closing also. The collateral of the loan becomes the real estate property. Thus hard money loans have become the first stop for almost every mortgage industry insiders.

Hard money loans are very easy to get and funded very fast. It does not require much documentation and the terms are very easy to qualify for. Credit scores or bad credit history also does not affect the application of such loans. Hard money loans also give benefits when you are in emergency and need to close the loan. You do not have to wait for a long time and close the loan on the same day itself.

Based upon their lending criteria, hard money lenders lend money usually on a short – terms basis like 6 months to 1 year. These may include loans like bridge, refinance, development, acquisition, rehab, etc. The borrowers get a financial gain as the rates of interest of such loans are higher than other conventional loans. The type of loan will usually vary from lender to lender. This will include the application fees, due diligence fee and commitment fee. Some lenders also may charge for fund interest, origination fees, rehab money, etc. while others will not. So while selecting a hard money lender, you have to verify all the options which fits you the best.

There is a scenario of someone involved in foreclosure. If a homeowner falls behind their house payments, most lenders will not provide them loan or restructure their current loan. But sometimes an individual in foreclosure may obtain hard money loan to avoid foreclosure proceedings and use the time to sell the property. The question arises to why the hard money lenders loan money when traditional institutions avoid this kind of gamble. This must be because the lenders charge a higher rate of interest than traditional institutions. Secondly the lenders require the borrower to keep at least 25 – 30 percent equity in real estate as collateral.

Thus a hard money loan is a bond between a lender and a borrower in a tough spot. The lender is always there with a higher risk to chance a greater return. This all scenario has made hard money loans the first stop to many mortgage industry insiders.

Starting New Year with new Home:

First of all let me wish you all a very happy new year!! May all your wishes come true and hope you have a successful year ahead filled with prosperity and happiness.

With the ushering of the New Year, many of us are thinking of moving home and I am sure its probability is not very less. There may be different reasons behind it - some may just need a change, some out of necessity or some may have got great offer or opportunity to purchase their first home.


If you are one of them, I must say this is the right time. The housing market is showing shaky recovery from the recession and is still low. Moreover, mortgage rates have declined this week after some gains earlier. Even the government has been kind enough to help people by providing a certain type of grant. This grant will help the first time buyers to pay for a proportion up to and including 30% of the property price. The idea behind it is to allow you to get a smaller mortgage and the loan amount free of interest for five years. Thus giving you an option of save money to pay it back. Just keep in mind that there are certain conditions for these loans to be accepted.

Let us forget about the bad patch that the first time home buyers had to face last year. Take full advantage of the government scheme and fulfill your dream of a new house. Hopefully more of us will have the option of getting new homes sussex in 2010.

Wisconsin has a no down payment mortgage loan program

All home buyers in Wisconsin have a mortgage program available that does not require a down payment. The program is a Rural Housing mortgage loan.


Minimum down payments on other loan programs have made it more difficult for home buyers to qualify for a mortgage loan in Wisconsin. The Rural Housing program allows a true 100 percent financing loan for any home buyer in Wisconsin. You do not have to be a first time home buyer to qualify for this mortgage loan.

One of the most important things to remember about this program, is that it requires the home to be located in a rural area. Wisconsin home buyers are in a better position to qualify for this loan, because the majority of the state is made up rural areas.

Here are additional details of this program:

• This program is called "Rural", because there are certain areas that are not eligible for this program. All of Milwaukee county is NOT eligible, but many areas throughout the entire state of Wisconsin are eligible.
• Lenders are approving loans with credit scores as low as 580. Typically, a 620 is best, but if there are compensating factors to help offset the risk of a credit score below 620, it’s very possible you will be approved.
• There is absolutely no PMI (private mortgage insurance) required with the total mortgage payment. Yes, no PMI, even though you won't need a down payment.
• There are income limits, but they are based on the county the property is located and how many people will live in the property. If you have child care expenses, these can help to reduce your total income and help with staying under the income limits.
• Maximum financing is allowed up to 102% of the appraised value of the home. So, it’s possible all the closing costs can be financed into the loan and not required to be paid out of pocket.
  

It’s very important home buyers take the time to get pre-approved for a mortgage loan, before looking at homes. Especially, if you are looking to buy a home with no money down, because sellers are going to want to work with serious buyers and serious buyer have pre-approval letters.

Learn more about no down payment mortgage loans in Wisconsin, so you understand what is available.

Payday Loan Tips

A payday loan provides an excellent option to help you deal with the late payments and other charges in the time of financial crisis. This is one of the best options for finding quick cash in a hurry. You will see that sometimes certain situations arise when you are in need of money but hesitate to ask any favor from your friends or relatives. These short term payday loans are ideal for such emergency cases.

A number of types of payday loans are available these days. Let me list few of them for your review:

*Online Payday Loan
*No Fax Payday Loan
*Bad Credit Payday Loan
*Instant Payday Loan
*Low Fee Payday Loan
*Military Payday Loan
*24 Hour Payday Loan
*Paperless Payday Loan

You have to decide and choose accordingly the type of loan that will be suitable for you. Just keep in mind few points before applying for payday loans.

• As there are a number of companies providing payday loans, collect information about the company, for how long has been in this business, about its clients and references before selecting the company.

• Since they are available instantly do not go for huge amounts as the interest rates are generally very high. It is better to apply for the amount that you require.

• Do a little bit of market watch so that you do not miss out the option of the lowest rate available for your loan.

Please share your experience and suggestions regarding payday loans, and feel free to add any points that I have missed out here.

Mortgage Calculator : A Handy Financial tool

If you are going to get a mortgage to buy a home for the first time, the first step is to assess your financial situation. This is a vital point to remember that before taking out a mortgage, you should be able to know where you stand financially so that you do not face any problem paying off the monthly amount. Otherwise the dream of your house will eventually disappear and you will have to walk away from your home sweet home.

A number of free mortgage calculators are available online for your convenience. Using these calculators, you can yourself find out the variation in payments for FHA loans and conventional mortgage loans. Moreover it will be easier for you to decide your right option - 15-year fixed rate mortgage or 30-year fixed year mortgage.

A mortgage calculator is a very handy tool to compare the rates from different mortgage providers. There exist a variety of calculators online which are quite simple to use. You just need to fill in your loan amount, length of term and the interest rate, and then simply hit "calculate mortgage". Entering different rates you can decide for yourself the best option for you that you can afford. Basically you can check the "what if" scenarios - changing the term, loan amount or the rates, you can work out your budget accordingly.

I have listed below some of the common types of mortgage calculators that can be beneficial for you. Just search them online and choose accordingly.

• Simple monthly mortgage

• Home affordability

• Mortgage comparison

• Mortgage qualification

• Amortization schedule

• Mortgage refinancing

Some steps to get mortgage refinance approval:

Earlier getting approval for mortgage refinance was quite easier as compared to the present scenario. The homebuyers who had honest credit history and can afford a first installment, just had to do a few paperwork with a refinance company and the dream house was there. At present, the picture is totally different and have to face challenging conditions before getting approval for mortgage refinance.

Here I have just jotted down some steps for mortgage refinance approval:

1. Some basic research: It is always advisable to do some basic research about your current interest that you are paying, how much is your house worth and how can you get the maximum
advantage from the new agreement.

2. Check out the finances: Calculate how much finances you can obtain. Approximately 80% of the value of your house will be the amount that you can obtain on refinancing if you have good credit
history .

3. Save time with proper documents: If you want go ahead with no check credit refinance, try to have the necessary documents ready, that the lenders generally asks for, to save time.

4. True evaluation of your property: Once you have decided on the lender, it is very important to ensure that your property is in a good state. If necessary do some repairing, so that it is evaluated at the maximum price. Also don't forget to compare the rates and choose the one that best suits your requirements.

5. Go to closing: Always remember that you are in control now and do not do anything stupid with your money. There are many lenders and banks who will work with you. More the number of creditors, more is the possibility of getting your mortgage refinance.

15-year and 30-year mortgage - Pros and Cons

Deciding on a mortgage term is one of the important factors for the home buyers. While talking of mortgage, we generally think of the interest rates alone. But the mortgage term is something more basic that you need to consider, which usually come with two options: 15-year or 30-year mortgage.

15-Year Mortgage

In a 15-year mortgage term you have to pay less interest rates as compared to 30-year loan. Even though the monthly mortgage payments are higher, but still people prefer as it allows them to build home equity quickly because of shorter amortization. Another reason for the popularity of this type of mortgage loan is that everybody wants to clear debt as quickly as possible.

Pros:

Less interest

Loan cleared faster

Cheaper mortgage insurance

Cons:

Higher mortgage payment

Less chance of benefiting from other investment

30-year Mortgage

The 30-year mortgage has the advantage of lower monthly payments due to which it has been a choice for many homeowners in the past. The fluctuation in the interest rate does affect you monthly payment in the entire time period.

Pros:

lower mortgage payments

Capital repayment

Better than renting

Cons:

More interest paid

Negative equity

Less flexibility

Choosing the length of the mortgage term is totally up to you. Here I have just jotted down the pros and cons of both the terms that can help you choose the best option for you.

99 years in Prison for Mortgage Fraud

Recently, a woman from North Texas was sentenced to 99 years in prison for being involved in a mortgage fraud scheme. Yes you read it right! 99 years in jail. One can rather say life imprisonment. Kandace Yancy Marriott, a 52 year old lady of Gun Barrel City, was found guilty of framing a complicated mortgage fraud that cost taxpayers more than $3 million.

Kandace Yancy Marriott

A Navarro County jury found this Mom guilty of forging signatures of home-owners, supporting loan applications with false documents and incorrectly completing loan applications. Together with Kandance Marriott, her husband Darrell L. Marriott, their daughter Kally Marriot and Kandance's sister, Karen Hayes, were also involved in this major criminal activity. All of the defendants are facing different charges for related criminal conduct.

According to the prosecutor, such fraud scheme was orchestrated at their own company, One Way Home and Land. They targeted mainly low-income people whose loans were guaranteed by the U.S. Department of Housing and Urban Development. Due to this reason, the mortgage lenders did not face much financial losses but the tax payers and HUD had to cover up the costs.

The additional number of years in this tough sentence was a consequence of multiple criminal offenses committed by her. Nearly a century in prison, is it too harsh?

On the brighter side, at least from now onwards, one will fear before framing any mortgage fraud scheme, and hopefully this would further reduce the number of occurrences of fraud cases.

Home Equity Loans for Mobile Homes

A home equity loan is generally referred to as a second mortgage. By the definition, a home equity loan is a kind of loan in which the home equity becomes the collateral. In the following video, you will get to know about home equity loans for mobile homes.

Credit Repair - Is it important?

Credit repair is hugely important to all of us because a poor credit record can have a dramatic impact on our lives. In fact, there are many car insurance companies that now utilize the consumer's credit rating to determine the amount of the premium they will charge, because statistical evidence has shown that lower the overall credit rating, tends to equate to more insurance claims.

If you want to purchase a new home or take out a bank loan, or perhaps even before you are offered a job, you will have to undergo a credit search, the results of which will then determine if you are "suitable" to be offered a mortgage, a loan or that job.

Credit repair has become big business now because of the amount of errors that are filed on a credit report. It has been estimated that over two thirds of credit reports contain at least one error. These errors will not simply vanish - they need to be proactively corrected. It has been reported that having only one to two errors corrected on a credit report can improve your credit rating by between 50 to 100 points!

How then, would having these errors eradicated, affect you?

Say for example you called your credit card company and asked them if you could have a lower interest rate on your card. Well, chances are they would say yes because you could go elsewhere and negotiate a better deal due to your good credit rating. Why would you choose to pay 30% on your balance when you could re-negotiate to 12%? This same scenario does not only apply to your credit cards, but also to your mortgage, to your car loan, to your bank loans and pretty much any other debts you may have too!

So, if you are thinking about a new credit card, or you want to get a new car on loan, now is the time to assess your credit ratings and do any credit repair that needs doing. It's a process and it will not happen over night. The sooner you do this the better!


This article was contributed by Joseph Archibald who writes for and moderates www.WhichCreditCard4Me.com

Mortgage loan with bad credit

Many of us have the notion that one cannot afford to get a mortgage loan with bad credit. This is actually not true. Even if you have gone through foreclosure or have filed bankruptcy, you can certainly buy a home with bad credit. Of course the interest rates will be much higher and you got to do a lot of research, but the most important thing is that even with bad credit, you can get qualified for home mortgage loan.

Nowadays, there are a number of companies and lenders out there offering home loans to people with bad credit. This is because, in recent times, bad credit home mortgage has become a good market to be in. Here is a video for you that will help you to know about some bad credit mortgage tips.



I have listed here some of the points that you need to know and do a little bit of research on while applying for the loan:

1. Loan type
2. Interest rates
3. Loan fees
4. Shop around properly


So do not think that bad credit will prevent you from fulfilling your dream of owing a home. The challenging experience will bare a sweet fruit at the end.

High hopes from Obama's Home Loan Modification Program:

President Obama announced the details of the new home loan modification program around a couple of months ago which showed a lot of hopes and potential. The plan is designed so as to help around 9 million homeowners modify or refinance their existing mortgage loan program. This program, named "$75 billion Homeowner Affordability and Stability Plan", induced high hopes amongst the numerous homeowners. Particularly those homeowners, who were about to lose their homes to foreclosure, could actually breathe a sigh of relief. Thanks to Mr.Barrack Obama.

With this program, loan modification has become much more attainable and real hope is finally here. The plan aims at reaching out to 3 to 4 million households in US who are in need between 2009 and December 2012. This plan was designed as a consequence of the rapidly increasing number of Americans unable to pay their mortgage payments. However there are many requirements that has to be fulfilled to be eligible for the program.

The following are some of the general guidelines:

1. The home must be your primary residence.
2. You must able to show proof of your income.
3. Your monthly payment must be more than around 38% of your gross monthly income.
4. This program is not available on second mortgage.
5. Your current mortgage was originated before Jan 01,2009.
   

If you can fulfill the needed requirements and prove your financial hardship, you can qualify for the program. Lenders are also happy to accept the plan due to fact that homeowners are really in hardship. Moreover, for a successful modification program, they can get around $1,000 each year for 3 years.

So all in all, this is a standardized program for both the homeowners as well as the lenders. Also there is no negotiation problem involved, either you qualify or you don't. You can save thousands by following some simple steps.

What's the point with Mortgage Points?

Anybody having some knowledge on mortgage, or who has undergone the home purchase process, or has compared mortgage rates, must have come across the term 'Mortgage Points'. Though the term sounds a bit abstract but it's fairly a simple concept.

A mortgage point is nothing but a percentage of the loan amount that has to be paid to the lender. One point simply means 1% of your total amount of loan. For example, say your loan amount is $450,000 and the lender is charging 1%, so it'll be a cost of $4500.

We all know that the mortgage process differs with places all over the world. However the concept of paying mortgage points is quite common in United States. There are basically two types of mortgage points - Discount points and Originating points. Depending on the type, the lenders charge different amounts. So it's wise to choose the one that best suits you. Lets briefly discuss about these two kinds of points:

Discount points: These are prepaid and tax deductible interest that help you to lower your overall mortgage payments. The basic idea here is to pay little extra at the beginning, the interest rate gets decreased by 0.25% with purchase of each point and you can pay less over time.

Originating points: In this type, as the name suggests, you have to pay these points for launching your mortgage. They are not tax deductible and does not have much valued benefits.

Now the question arises, why should you pay mortgage points? Let me give you a simple example. Consider, in the first situation, your lender has offered you a mortgage at 8.75% interest and with no points. Whereas in the second case, say you are offered for 8% interest only if you pay 3 points. Now, over the time period of a 30 year mortgage, you would save money if you choose the second case. But keep in mind, if you plan to live in the home only for a shot span, then avoiding mortgage point is a better option.

In most cases, paying mortgage points has been effective in saving a lot, in the long run.