Points and credits are tools you can use to adjust your home loan rate up or down to suit your needs. “Taking credits” means accepting a higher interest rate on your loan in exchange for lower costs at closing. The opposite of taking credits is “paying points,” which involves paying more at the time of closing in exchange for a lower interest rate (and lower monthly payment).
When do these strategies make sense? Every buyer’s situation is unique, but one common scenario is that people who expect to refinance or sell their house within ten years often find it beneficial to take credits, while those who expect to stick with their home loan for the long haul can save money over time by paying points up front in exchange for a lower monthly payment.
At Solarity, our expert Home Loan Guides have your best interests at heart, and will help you explore your options and figure out what approach works best for you.
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