Question for Patti:  I have heard people refer to "buydown" or "discount" points.  What are they?

Anwer to Heather: Discount points help BUYERS save costs over the life of the loan.  Discount points are fees paid at closing to lower a monthly mortgage payment over the life of the loan.  In essence, points are prepaid interest.  A point is 1 percent of the loan.  So if you are buying a Felton Home and there is going to be a $500,000 loan, one point equals $5,000.  This cost is paid to buy a lower interest rate, and is known as a rate buydown.

If you intend to keep your home for only a short term----five years or less---then you might not recover the cost of paying the discount points.  If you plan to keep your mortgage for a long time, then discount points are an excellent upfront investment.

Another key benefit is what discount points for residential real estate are tax deductible in the year they are paid. Consult your tax advisor regarding the details of these deductions.

Felton Home Seller, If you'd like to learn more about how "buydown" or "discount' points effect you in a transaction and what they mean to you r bottom-line please contact me.