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I’ve been doing some more research on mortgages. There is so much to learn about mortgages. I think the real key is to find one of the many mortgage brokers there are out there. There are also a lot of good websites out there that share a lot of good information.

For example, I was looking at points and fees (like closing costs) to see how that affects your mortgage payment. In order to understand what it means to purchase points there is a good mortgage caluclator that shows you the impact that purchasing points will have. Here’s an example output:
Without Points With Points
Amount Financed $200,000.00 $198,000.00
Monthly Payment $1,248.39 $1,167.15

Monthly Payment Savings $81.25
Points Value $2,000.00
Monthly Investment Savings $8.33
True Monthly Savings $72.91
Break Even 2 Yrs 4 Mts

Basically with just one point purchased you are able to save $81.25 a month. Now, realize that this one point is going to cost you $2000. So, it even tells you the break even point is 2 years and 4 months. If you plan to sell before that time frame then you definitely don’t want to buy points. However, if you are staying there longer then you should probably look into purchasing points if you have the money.

Closing costs have almost become a null issue these days. They are the bargaining chip that most people offer. Also, in the end almost any mortgage will just roll the closing costs into your loan. Think about this. If you are trying to reach the holy grail of 20% down on your mortgage (so you don’t have to pay insurance), then you better take 20% and add in the closing costs to the amount of money you’ll need to purchase a home. Otherwise, you might be up a creak without a home.