Two years ago in Fairfield Connecticut I would have never heard a client tell me that they wanted to pay points in order to be able to afford their payment. However over the last several months many Connecticut homeowners with fair to average credit scores have made that request in order to lower their monthly mortgage payment or preserve their current interest rate. This is partly due to the fact that so many subprime lenders have gone out of business and the remaining banks are only offering high interest rate loans to Connecticut homeowners that had previously qualified for low rate mortgages.
The main concern used to be, Do you plan on keeping your loan for a while? Then it may make sense to buy a lower interest rate by paying one or more points. However now the concern is now, how do I lower my homeowner's insurance, taxes and mortgage payment all while nursing my low credit score.
You may find yourself in the same predicament. However, there is a solution!
Let's keep in mind that a point -- which equals one percent (1%) of the total loan amount -- is an up-front fee that lowers your annual interest rate and total interest due over the life of your loan. So, a one point loan will have a lower interest rate than a no point loan. Basically, when you pay points you are paying money later in favor of paying money now. You can pay fractions of points, meaning there are a lot of points packages that can make a loan's terms more favorable if that's what's right for you.
The loan program that I advise all of my clients to use is the FHA program. There is no minimum credit score requirement, no pre-payment penalty and the rates are in the 6% range. Additionally, you can avoid paying high point fees and you will have the backing of the federal government if you are ever in a situation that may lead you to default. The FHA program is a must for the hard-working American who needs to save every dollar that you can.
Chris Rivers, a Connecticut mortgage broker, specializes in offering low interest rates for Connecticut refinance mortgages after bankruptcy even if you have 30, 60 or 90 day lates on your mortgage and late payments on other accounts. When you need to refinance your Connecticut adjustable rate home mortgage into a fixed rate mortgage with great credit scores then use a Connecticut FHA Mortgage
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