Should You Pay Loan Points on Your
Tucson Home Loan?

Well, it Depends.

When comparing interest rates for your Tucson Home Mortgage you will usually have the option of choosing a home loan with a lower interest rate by paying points. Simply put, a point is equal to 1 percent of the loan amount. For example, with a $100,000 loan, one point equals $1,000. Points are usually paid out-of-pocket by the buyer at closing. Paying points may seem attractive, because a lower interest rate means smaller monthly payments. But is paying points always a good idea? The answer generally depends on how long you plan to stay in your new home.

Let’s look at an example, Pat and Brenda (that’s us) are shopping for loan rates on a $300,000 home. Our Tucson Home lender has offered us a 30 year loan at 7.5 percent with no points. This works out to a monthly payment of $2,098. however, our lender has also offered us a loan at 7 percent if we agree to pay 2 points (or $6,000). At this lower rate, our monthly payment drops to $1,996, or a savings of $102 per month. By dividing the amount we paid for the points ($6,000) by the monthly savings ($102), we can see that we will have to own our new home for 59 months (almost 5 years) before we will start to see savings as a result of paying points. If we plan to stay in our new Tucson Home for many years, then paying points could make good sense. But if we plan on moving to another home in the near future, we’d be better off paying the higher interest rate and no points.

Can you deduct points on your income taxes? YES, usually. One side benefit of paying points on your Tucson Home mortgage is that the points are fully tax deductible in the same tax year as your home is purchased (closing date). However, this does not apply to points paid for a refinance loan. For refinances, the IRS requires you to spread out the deduction over the life of the loan. For example: If you paid $6,000 in points for a 30-year refinance loan, you can only deduct 1/30 of the $6,000 each year for 30 years. If you pay off the loan early, though, you can deduct the remaining amount that tax year.

As Always, Consult with your tax preparation professional for qualified and detailed information on Tucson Loan Points.

If you have questions about Tucson Loan Points or any Tucson Homes for Sale,
Email Brenda or call her Today at 520-918-5968
Return to Tucson Real Estate Home Page

Tucson Home Finder, Tucson Homes Virtual Search
Tucson
Home
Finder
Tucson Community Information, Links to dining, shopping, entertainment and more
Tucson
Community
Info
Tucson Relocation Package, Free Tucson information, Available upon request
Tucson
Relocation
Package
Top Tucson Realtor Brenda OBrien
All
About
  Brenda  
Tucson Home Buyers Center, Information important to Tucson Home Buyers
   Tucson   
Home
Buyers
Tucson School Info, Schools, District Maps, Tucson School Report Cards
    Tucson   
Schools
Info
Tucson Golf, Tucson Golf Courses
  Tucson  
Golf
Courses
Tucson Home Sellers Info, Current Market Conditions, How to Price your Home, etc
 Tucson  
Home
Sellers
Tucson Housing Report
Tucson
  Housing  
Market

Brenda's Tucson Home Listings
Brenda's
Tucson
Listings
Tucson Condos and Townhomes
Tucson
Condos &
Town Homes
Tucson Helpful Links, Utilities, Maps, Relocation, Home Improvement, News Media, etc
Helpful
Tucson
Links
Tucson News
Monthly
Tucson
Newsletter
What People Say About Brenda, Client Testimonials about Tucson Realtor Brenda O'Brien
What
People
Say
Tucson Home Values, What's my Tucson Home worth today?
What's My
Value
Today
Tucson Home Mortgages and Tucson interest rates
Tucson
Home
Mortgages
Tucson New Home Information
Tucson
New
Homes
Oro Valley Homes
Oro
Valley
Homes
Tucson Homes by School District
Homes By
School
District
Catalina Foothills Homes
Catalina
Foothills
Homes
Rancho Vistoso Homes
Rancho
Vistoso
Homes
Tucson Homes - Age Restricted
Tucson
Retirement
Homes
Tucson Luxury Homes
Tucson
Luxury
Homes
Tucson Golf Homes
Tucson
Golf
Homes
Tucson Gated Homes
Tucson
Gated
Homes
Tucson Homes - Northwest
Northwest
Tucson
Homes
Tucson Homes - Other Areas, Other Styles, Homes with acreage, Homes with Guest Quarters, Etc
Other
Tucson
Homes

eMail Brenda
Tucson Multiple Listing Service - Invest Your IRA - Tucson Weather - Tucson Map - Tucson Utilities
Tucson Subdivisions - Catalina Foothills Subdivisions - Oro Valley Subdivisions - Marana Subdivisions
SaddleBrooke - Sun City Vistoso - Heritage Highlands - Vistoso Village - Quail Creek
Dove Mountain - Continental Ranch - District 16 Homes - Sam Hughes District
Tucson Horse Property - Rancho Sahuarita - Rita Ranch - Vail - Marana
Email This Page - Tucson Resources - Link to Me
Tucson Homes For Sale - Tucson Arizona
Site Map

  
Copyright ©1999-2016 All Rights Reserved

Copywrite Protected