every $100,000). Essentially, you pay some interest upfront in exchange for a lower interest rate over the life of your loan. In general, the longer you plan to own the home, the more points help you save on interest over the life of the loan. For example, Bank of America, Better Money Habits, uses a chart illustrating points using a loan amount of $200,000. It is possible to buy the points to ensure the interest rates are low when you are getting the loan. Buying the points can help you down the line by guaranteeing that you save money, especially if you plan to stay in the house for an extended period. However, the amount of cash you will save by buying the points depends on the number of points you buy. For instance, if your mortgage is $200,000 and you buy two points, you will owe $4,000 when closing (example only). Further related to taxes and property ownership is that once you own a house, you are a property owner, with the attendant obligation to pay property taxes. However, if you are a Veteran with a 100% disability rating, you are eligible for an exemption in the state of Texas. In order to take advantage of this, documentation has to be filed at your local county tax assessor office. Please check your with local county tax assessor for more information. The usual method of paying property taxes is to escrow the amount of annual taxes within the mortgage payment. The mortgage servicer will pay the taxes as they are due. When buying a house, your lender will calculate the total amount of real estate taxes, as well as the number of days in a property tax year that you were the owner of the said property and escrow that amount, adding it to the mortgage payment.
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