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. It’s possible to buy the points to ensure the interest rates are low when you’re 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’ll need 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 on top of your other closing fees. If interest rates are very low, the necessity or interest to "buy down" the mortgage rate isn't necessarily worth paying additional closing costs. Your loan office can discuss the options with you. Further related to taxes and property ownership is that once you own a house, you’re a property owner, you are obligated to pay property taxes. The usual method of paying property taxes is to escrow the amount of annual taxes within the mortgage payment. The tax and home owners insurance portion of the payment will be held in an escrow account. The mortgage servicer will pay the taxes and home owners insurance 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. People have been known to spend months looking for the best possible home and eventually find a good one. However, many of these individuals fail to understand the importance of finding a
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