I pay points to lower my interest rate?
If you plan
on staying in the property for at least a few
years, paying discount points to lower the
loan's interest rate can be a good way to
lower your required monthly loan payment (and
possibly increase the loan amount that you can
afford to borrow). If you only plan to stay in
the property for a year or two, your monthly
savings may not be enough to recoup the cost
of the discount points that you paid up-front.
Ask your lender how long it would take for
your monthly savings to recoup the costs of
the discount points.