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Should I pay discount points to get a lower rate?

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Everyone wants a bargain, right? When it comes to mortgages, you have an option to elevate that bargain: discount points.

By using discount points when you lock your loan, you get a lower interest rate for the life of your loan. A discount point is equal to 1 percent of your loan amount. For some borrowers, this is a no-brainer: they pay the point (or points) and then enjoy the reduced rate for years.

To help you decide, compare the lower cost of your monthly payments with the cost of the discount points. You'll see how many months it takes you to break even. If you're inside your savings zone, it might be worth going for it.