You can reduce your initial fixed rate by either paying points up front or buying down the rate. You can pay points to bring down the rate by paying a predetermined percent of the loan amount up front to reduce the rate over the long haul. As a rule of thumb, one point is equal to one percent of the loan amount and paying a point up front will reduce the loan interest rate by 1/4 % over the life of the loan. Points are defined as prepaid interest and therefore may be tax deductible.
Interested in buying down? Contact us to get started – call 1-800 LOAN-DML or use our contact form and a DML Mortgage expert will be in touch.