Navy Federal Mortgage Points: What You Need To Know
If you're in the market for a mortgage, you may have heard about the option to purchase points from your lender. Navy Federal Credit Union, one of the largest credit unions in the United States, offers mortgage points to its members as a way to save money on interest over the life of their loan. Here's what you need to know about Navy Federal mortgage points.
What are Navy Federal mortgage points?
Mortgage points, also known as discount points, are fees that you can pay upfront to your lender at closing in exchange for a lower interest rate on your mortgage. Each point typically costs 1% of your loan amount and can lower your interest rate by 0.25% to 0.50%. Navy Federal offers both purchase points and rate lock points.
What are the benefits of Navy Federal mortgage points?
There are several benefits to purchasing mortgage points from Navy Federal, including:
Lower monthly payments: By purchasing points, you can lower your monthly mortgage payments, making it easier to budget for your housing expenses.
Lower interest over the life of your loan: By reducing your interest rate, you can save thousands of dollars over the life of your loan.
Tax benefits: In some cases, you may be able to deduct the cost of your mortgage points on your taxes, which can help offset the upfront cost.
How do I know if Navy Federal mortgage points are right for me?
Whether or not you should purchase mortgage points from Navy Federal depends on your individual financial situation. Here are some factors to consider:
Your plans for the property: If you plan to stay in your home for a long time, purchasing points may be a good investment. However, if you plan to sell the property in the near future, it may not be worth the upfront cost.
Your cash flow: If you have the cash available to purchase points, it may be a good option to save money over the life of your loan. However, if you're tight on cash, it may not be feasible.
Your credit score: Your credit score can impact the interest rate you qualify for, which can in turn impact the cost of purchasing points. If you have a high credit score, you may be able to qualify for a lower interest rate without purchasing points.
FAQ
What is the difference between purchase points and rate lock points?
Purchase points are paid at closing in exchange for a lower interest rate on your mortgage. Rate lock points are paid upfront to lock in a specific interest rate for a certain period of time, typically 30 to 60 days.
Can I purchase Navy Federal mortgage points after closing?
No, you must purchase points at the time of closing.
Can I finance Navy Federal mortgage points into my loan?
No, you must pay for points upfront at closing.
How do I calculate the cost of Navy Federal mortgage points?
Each point typically costs 1% of your loan amount. For example, if your loan amount is $200,000, each point would cost $2,000.
Can I purchase Navy Federal mortgage points for a refinance loan?
Yes, you can purchase points for a refinance loan.
What is the maximum number of Navy Federal mortgage points I can purchase?
The maximum number of points you can purchase depends on the type of loan you have and other factors. You should consult with a Navy Federal loan officer to determine the maximum number of points you can purchase.
Are Navy Federal mortgage points refundable?
No, Navy Federal mortgage points are not refundable.
Can I purchase Navy Federal mortgage points for an investment property?
Yes, you can purchase points for an investment property.
Pros of Navy Federal mortgage points
The pros of purchasing mortgage points from Navy Federal include:
Savings over the life of your loan: By purchasing points, you can save thousands of dollars in interest over the life of your loan.
Lower monthly payments: By reducing your interest rate, you can lower your monthly mortgage payments.
Tax benefits: In some cases, you may be able to deduct the cost of your mortgage points on your taxes.
Tips for purchasing Navy Federal mortgage points
Here are some tips to keep in mind when considering purchasing mortgage points from Navy Federal:
Do the math: Calculate the cost of purchasing points versus the savings you will receive over the life of your loan to determine if it's a good investment.
Consider your future plans: If you plan to sell your property in the near future, it may not be worth the upfront cost of purchasing points.
Consult with a loan officer: A Navy Federal loan officer can help you determine if purchasing points is the right option for you.
Summary
Navy Federal mortgage points can be a good option for members looking to save money on their mortgage over the long term. By purchasing points, you can lower your interest rate, reduce your monthly mortgage payments, and save thousands of dollars in interest over the life of your loan. However, it's important to consider your individual financial situation and consult with a loan officer before making a decision.
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