What are mortgage points?

For most first time buyers, it can be difficult to understand everything about mortgages and points, even if a mortgage broker in Melbourne is trying to explain as wellas possible. Sometimes we just need to have someone else telling us this information in a different way. First time buyers don’t understand what the mortgage points are, nor do theyknow how to calculate these points. Here is some more information about what these points are, and how you can calculate them easily.

More than just mortgage payments

When you are going to get quotes from different banking institutions for getting a mortgage loan, you normally get information about the loan rates and mortgage points of the mortgage loan that you are going to borrow. Even if you are using a mortgage broker you need to know everything about the mortgage points and other aspects of the quote of the mortgage loan.

This is to show you exactly how much money you are going to pay foryourhome, and the points are normally additional fees that you’re going to pay extra for.

How to calculate these mortgage points

If you want to know whetheryou are going to get a great mortgage deal that the mortgage broker in Melbourne is suggesting, then you should know more about the mortgage point that you need to pay.

1 Mortgage point is basically 1% of the loan that you’re going to lend.An example of this is as follows:You are getting a mortgage loan, you intend to repay it in 30 years, and the amount is $200 000. The interest rate might be between 5% and 7%. If you need to pay 1 mortgage point, it means that you’re going to pay $2 000 fee for the banking institution that is lending you the money. Find out more informations here.

Different types of mortgage points

You normally get two types of mortgage points that you can use when you are using a mortgage broker for a mortgage. It is important to know these two different types of mortgage points, especially if you want to choose the best possible mortgage loan for you.

The first type of mortgage point is the discount points. With these points, it is simple: the more points you are paying, the less interest rate you are going to pay. When you are paying the discount points, you will ensure that your monthly premiums will be slightly lower than normal.

The second type of mortgage point is the origination fee. This fee is payable to the lender, to cover the costs of the loan. The great thing about the origination fee, is that it is tax detectable, so you get some of it back with your tax refund.

When you are going to apply for a mortgage loan, you should know that there are many aspects and terms used that is hard to understand. One of these terms is the mortgage points that you need to pay the lender. If you are still unsure about the mortgage points, you should definitely ask your mortgage broker in Melbourne, before you sign any mortgage contract.

Always visit http://www.mortgagebroker247.com.au/ for more informations and ideas.