Talking to a friend today in the mortgage world, it occurs how often salespeople sell what they have. His world is one of points He must charge points to make his revenue. Mine is a world of volume, and I can make the same amount whether a person pays points or not. One should rarely be forced to pay points or origination, but it is often in the customers benefit to pay both. As with so many questions, the answer to whether to pay points or not is... depends.
Bottom line is that the question of points seems simple. If I pay an extra $3000 grand today to save 30 bucks a month, I am flat in 100 months. But is not that simple. Can you write off the point? Yes, as long as you are not taking a standard deduction. So if you can't you aren't writing off interest either, but you might later, so now the $30 a month becomes $21 a month. And what about the time value of money. If i have 3000 today, I better have 6000 grand in 5-7 years or I am firing my financial planner (don't worry Larry)
So pay points or don't, but make sure you know why you are paying them. There is no short answer, one must consider tax situation, cash flow position, time in the home, time to the first refinance, what the points buy in rate, if you must pay origination, and finally, the closing cost being paid for you by the seller or builder. Be sure you discuss this with your professional.
And I must "point" out, not to be too punny, that the most interesting new restaurant I have found is not in Raleigh. It is in the peak of good living, Apex, NC. The Peak City Grill is incredible. Get the peak chips, homemade potato chips with bleu cheese and hot pepper jelly. Is that crazy? On Salem Street beside the fire station, get there as soon as you can.
