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Mortgage Points North Carolina

One of the issues affecting government insured mortgages involves points that the seller must pay. The buyer can also purchase points at settlement in order to obtain a lower interest rate over the life of the loan.
1. Local Companies
2. Overview
3. Definition Of Points
4. How Points Can Benefit A Homebuyer
5. Featured Local Company

1 . Local Companies

Primary Residential Mortgage, Inc.
(910)389-6809
825 Gum Branch Road
Jacksonville, NC
1ST METROPOLITIAN MORTGAGE
704-454-5656
4406 HWY 49 SOUTH
HARRISBURG, NC
CTX Mortgage Company
(980) 722-8794
1121 Old Concord Road, Suite 8
Salisbury, NC
DeCoux4u.com
919-279-1471
6020 Creedmoor Rd.
Raleigh, NC
Accubanc Mortgage
(704) 643-4011
6100 Fairview Rd
Charlotte, NC
Southgroup Mortgage LLC
(704) 362-3177
120 Greenwich Rd.
Charlotte, NC
The National Heavensent Company
405-494-4984
408 Allegiance Dr.
Raeford, NC
Admiral Home Mortgage
(704) 541-4707
7422 Carmel Executive Park Dr
Charlotte, NC
American Family Mortgage Service
(704) 927-1500
7422 Carmel Executive Park Dr
Charlotte, NC
Hardiman & Son, Inc.
(704) 633-2961
131 East Innes St.
Salisbury, NC

2 . Overview

When most people think of points, what comes to mind are those a seller pays for a buyer who obtains a government insured mortgage. Although government mortgages are the most common sources of points, they are certainly not the only mortgages that involve points. Any time there is a reduction in the standard interest rate, points are used to offset the lower interest rate. It is the method mortgage companies use in order to compensate for providing a buyer a lower rate than they would ordinarily offer. In the case of government mortgages, the seller must pay the points, but with other mortgages, the buyer pays the points unless other arrangements are negotiated between buyer and seller.

In addition to points assessed for obtaining a lower interest rate, banks may offer negative points in order to assist the buyer with settlement costs. The terms are very specific and do not allow buyers to use the funds from negative points toward the down payment. These are directed toward a certain type of borrower and may not be right for everyone. If used over a long period, you will pay high interest for what should be a short-term loan. Negative points loans are intended for those who have short-term needs, instead of those who wish to extend the payments over a long period of time.

3 . Definition Of Points

Points are used to allow a buyer to obtain a mortgage at an interest rate lower than they would ordinarily be able to obtain. Government mortgages such as FHA or VA insured loans require the seller to pay the points. Each point is worth one per cent of the mortgage and will vary depending on the interest rate for which the borrower would qualify at the time of settlement. In other words, if a buyer would ordinarily qualify for an interest rate of 6.5%, but the current rate on a government mortgage is 5%, the seller would have to pay one and a half points (1.5% of the loan amount) to close the sale.

In the case of a conventional or non-government insured mortgage, there are customarily no points involved. However, the buyer has an option to purchase points at closing in order to reduce the interest for the life of the loan. Whether this is a wise move or worth the investment depends upon the interest rate and mortgage amount to be financed. Certainly, if you are looking toward the long term, it will save you a great deal in interest even by reducing your interest by one per cent and buying one point at settlement. The savings over the term of the mortgage can make a substantial difference in the equity of your home in the following years.

4 . How Points Can Benefit A Homebuyer

One of the most substantial expenses a homeowner faces is that of interest on the mortgage. Depending on the current trend in interest, it can cost three times the original loan amount and higher for a thirty-year fixed rate mortgage. Of course, if you finance your home for a shorter time, you will pay less interest without raising the payments much more than a thirty-year loan will cost. You need to look at the big picture in order to know what the future is going to hold for your financial future.

Purchasing points at the time of settlement can substantially lower your interest payments over the term of the loan without costing you a great deal of money. A point is equal to one per cent of the mortgage amount or $1,000 for every $100,000. The number of points you need to purchase to obtain the desired interest rate depends upon the prevailing rate of interest at the time you close your loan. The higher the prevailing rate of interest, the more points you need to purchase in order to obtain the interest rate you desire. Of course, if you have a government-insured loan, the seller is obligated to pay the points, thus the reason many sellers try to avoid selling to buyers who desire to use these mortgage funds.

5 . Featured Local Company

Admiral Home Mortgage

(704) 541-4707
7422 Carmel Executive Park Dr
Charlotte, NC
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