11 strategies to help you save on your mortgage -2-

“When choosing between a 20% down payment or purchasing points, make sure you run the numbers,” he advises. “A lower down payment can also mean paying for private mortgage insurance, so calculate whether the added expense of this insurance would cancel out any savings from purchasing points.”

And that’s why Lerner says it is important to work with a trustworthy and knowledgeable mortgage professional. “You want to ensure that the points paid are to reduce the rate and not increase the lender’s profitability or compensation,” he says, “and that the borrower will have the mortgage long enough to recoup the upfront expense of the points with the lower monthly payments.”

Terri Williams has over 10 years of experience writing about student loans, mortgages, real estate, budgeting, home improvement and business in general. Her work has appeared in The Economist, TIME, Forbes, Architectural Digest and Realtor.com.

This article is reprinted by permission from NextAvenue.org, (c)2023 Twin Cities Public Television, Inc. All rights reserved.

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08-10-23 0501ET

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