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What is “buying down” my interest rate (also known as paying points)?

April 26, 2017Interest rate known paying Points

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What is “buying down” my interest rate (also known as paying points)?

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Buying down (or paying discount points) refers to the payment of points (each point is equal to 1/100th, or 1%, of the loan amount) to reduce the interest rate you are charged to borrow the money. Your loan officer can help you to determine whether buying down your rate is a smart choice.