For the Right Homeowner, an “All-in-One” Loan Can Pay Down Your Mortgage Faster

I was reminded recently about a very non-traditional mortgage loan option that might interest you. The “All in One” has been available for many years but has been widely overlooked in recent years in favor of low fixed-rate loans. I asked Jaxzann Riggs, owner of The Mortgage Network, to explain how the loan works.

The “All in One” (AIO) loan is aptly named because it ties your mortgage loan and checking account together. They become one account. Dollars left in your checking account overnight reduce your mortgage balance for that day (and subsequently the interest due on the loan).

Typically, the money that you have in your checking account does not earn interest. When your money is sitting in your checking account, it’s “working” for your bank, not you. Banks lend out the dollars that you leave in your checking account overnight to other banks, earning interest on those loans. 

The AIO checking account (which is also your mortgage account) can be used just like your current checking account. You deposit your earnings into the AIO account and pay your monthly bills (including the monthly mortgage payment) out of the account.

Since the amount of interest that you pay on your mortgage loan is based upon your loan balance, any extra money that you store in your account lowers both your loan balance and subsequently your interest owed for that month.

Interest on your mortgage is accrued daily, so you will benefit even if money is moving in and out of your account frequently. For example, if you are paid on the first of each month but your bills aren’t due until later in the month, your paycheck would be lowering your loan balance and interest payment just by sitting in your checking account for a few weeks.

Typically, an AIO borrower will store some portion of their emergency funds or savings into their AIO account. All funds in the account can be used whenever needed, but you will be reducing your mortgage balance by that amount if it’s in your AIO account.

Some will ask, why not just make extra payments to a traditional 30-year fixed mortgage? While making extra payments on your mortgage will also have the same effect of paying down your principal balance quicker, you won’t be able to access the dollars that you have prepaid if you need it in the future. To accomplish that, a borrower with a traditional loan must either refinance his or her current loan or obtain a HELOC to access equity. Also, while you will end up paying off your loan earlier, your monthly payments will always stay the same if you are in a fixed rate product.

Because the All-In-One loan is an adjustable-rate mortgage it is possible that you will be paying a higher rate for the AIO than a fixed rate option. The goal of the AIO is to utilize your excess cash to reduce your loan balance faster than a traditional loan. That is where the value lies.

The AIO can be used to refinance your current loan or to buy your next home, but it is not going to be the best option for everyone. The ideal AIO candidate has a history of having money left over each month after paying all bills. The requirements include a high credit score, and a lower debt-to-income (DTI) ratio than most mortgages allow.

If you are interested, Jaxzann, who is a licensed mortgage broker and certified to offer the AIO, will carefully analyze your current income and spending habits and create a personalized scenario for you. You can reach her at (303) 990-2992.

Good Mortgage Lending News for First-Time Homebuyers

There is great news this month for first-time homebuyers. The Federal Housing Finance Agency (FHFA) has made changes that will benefit up to 20% of people looking to buy.

The most significant could result in as much as a 0.5% reduction of the interest rate. When you apply for a mortgage, your rate is based upon various risk factors. If you have a low credit score, a small down payment, or are buying an investment property, your loan is at a higher risk of default than someone who has excellent credit, large down payment, or is going to live in the home. These risk factors are added into your interest rate as “Loan Level Price Adjustments,” or LLPAs.

First time home buyer programs such as “HomeReady” and “Home Possible” have always had reduced LLPAs, but this month FHFA announced that they are removing all such pricing adjustments from their most popular first-time homebuyer programs.

FHFA has also increased the income limits associated with the programs and is allowing lenders to offer up to $2,500 in grant funds to qualifying borrowers. If you have questions about a first-time homebuyer mortgage, reach out to Jaxzann Riggs of The Mortgage Network at (303) 990-2992 for answers.

A Reader Asks: Could a Reverse Mortgage Be Funded by Heirs at Less Cost?

Recently, I heard from a reader about reverse mortgages. The reader astutely observed that the costs associated with a reverse mortgage (or HECM) could be eliminated by putting a family-funded mortgage into place. This would require an attorney to draft the legal documents that would spell out and secure each family member’s future interest in the property, but those fees would likely be lower than the costs associated with a HECM.

I asked Jaxzann Riggs, owner of The Mortgage Network to weigh in on the topic. “Absolutely,” she told me, “a family-funded reverse is preferable to a traditional reverse if the homeowner has a family that is able and willing to be the lender.”

Reverse mortgage closing costs are very straightforward. A borrower should expect to pay, on average, a 1% origination fee and a 2% initial mortgage insurance premium, plus closing costs and third-party fees such as appraisal, title, settlement and recording fees.

Jaxzann told me there is a difference, however, between closing costs and the actual expense of a reverse mortgage. The expense is far more difficult to calculate because it would require concrete information about the future value of the home, the duration of the occupancy (how long will the owner live in the home), and how much the homeowner will draw now and in the future from the home’s equity. A homeowner who decides to sell the home within a few years after creating a reverse mortgage would find it to be VERY expensive.

If a borrower rolls $10,000 of closing costs into the loan balance and then sells the home after one year, the cost of selling (without calculating and adding the interest and mortgage insurance accruals) would be the full $10,000. If, on the other hand, the homeowner lives in the home for 20 years, the initial cost spread out over the life of the loan would be approximately $500 per year. The future appreciation or depreciation of the home is critically important when attempting to calculate HECM expenses because, unlike a family-funded reverse, FHA HECMs are non-recourse loans meaning that if the home is worth less than the dollars owed at the time of sale, the borrower or heirs are not responsible for the deficiency. If the home does not appreciate much (or depreciates), a HECM can be very inexpensive.

The Slumping Stock Market Is Making a ‘Reverse Mortgage’ More Appealing to Baby Boomers

Many people who are considered “baby boomers” (born between 1946 and 1964) are now either in retirement or fast approaching it. In fact, About 10,000 baby boomers turn 65 every day. 

Park Hill residents Sandra and Daryl are excited and eager to join their retired peers, however with recent declines in the value of their retirement portfolio, they are concerned that those accounts may not cover their expenses (including their current mortgage payment) for the rest of their lives. While they still have some money owing on their current home they have built a large amount of equity over the past 20 years that can be used to ease the way into retirement. Jaxzann Riggs, owner of The Mortgage Network, explains how that might work. 

Home Equity Conversion Mortgages, more commonly known as “reverse mortgages” or “HECM’s” have become increasingly popular over recent years, and for good reason — a reverse mortgage allows homeowners to access the equity in their home. Borrowers with adequate equity can refinance their existing loan into a reverse mortgage OR they can use a reverse mortgage to purchase a new home.

Borrowers keep ownership of their home as they continue to age, and “non-borrowing” spouses (younger than 62 years of age), may continue to live in the home until his or her death. Borrowers also have flexibility about how they choose to access their equity, allowing people to choose what is best for their circumstance.

Ending current mortgage payments, receiving monthly payments, receiving a lump sum of cash, or creating a growing line of credit are four different options that a borrower may choose to utilize, or they can opt for a combination of all four. This money can be used however a borrower chooses and, because it is considered “borrowed” money and not income, it is not taxable and does not reduce Social Security or Medicare benefits in any way.

Here are some of the common myths and misconceptions about reverse mortgages:

Myth #1: The lender will take ownership of the home.

FALSE: Borrowers will retain ownership of the property. The lender does not take control of the title. The lender’s interest is limited to the outstanding loan balance.

Myth #2: I will be forced to forfeit ownership of my house, the bank will take the title to my home..

FALSE: The heirs will never owe more than the value of the property; however, they will have the option to repay the loan and keep the house for themselves.

Myth #3: To qualify for a reverse mortgage, a home must first be paid off — “free and clear”

FALSE: Even if you still have a loan on your home, you may be eligible for a reverse mortgage.

While relatively easy to obtain, HECMs are not for everyone. You must be at least 62 years of age, have substantial equity in your property, and occupy the home as your primary residence. To be eligible, a reverse mortgage normally requires a minimum of 50% equity in the property. Given the very real possibility of a correction to real estate values, now may be the perfect time to consider your reverse options. Eligible property types include single family homes, two- to four-unit properties (borrower must occupy one unit), townhomes and modular homes, and FHA approved condos.

Some things to remember:

1)    You are still responsible for paying property taxes, homeowners’ insurance, and monthly HOA fees for the home, even though you won’t have a monthly mortgage payment.

2)   If you aren’t living in the home for the majority of the year, or are planning on moving soon, then a reverse mortgage may not be the best fit for you. 

Interestingly, ‘Seller Concessions’ Can Benefit Both Buyers & Sellers

If you’ve been following my “Real Estate Today” column, you know that homes are taking longer to sell, and in some areas sales prices have decreased slightly.

Jaxzann Riggs, owner of The Mortgage Network, has been serving Colorado borrowers for 37+ years and she has witnessed more market fluctuations than I have in my 20 years. I asked her what “old and new” marketing and financing strategies she suggests for both buyers and sellers in this dynamic market.

   Her response: “First, buyers need to understand their highest priorities. Is investing the smallest amount of cash their priority, or are they more interested in minimizing the monthly housing expense in the early years of the loan? If they expect to own the property for many years, having the lowest possible 30-year fixed rate may be the highest priority. Buyers who are fortunate enough to be paying cash for a home are normally looking for the lowest possible purchase price, in which case seller concessions won’t matter to them.”

Let’s analyze each goal and how a seller concession built into a purchase contract can help you.

Goal #1:  Lowest Cash to Close

If your income is good and you are not concerned about your monthly housing expense, but you don’t have much cash to work with, a popular seller concession is one that covers your closing costs. That way, you only need cash for the down payment.

Goal #2:  Lowest Payment in the Early Years of Your Mortgage

If your income is likely to increase in the near future, and you want to minimize your monthly housing expenses until your pay increases or you receive an expected bonus, a temporary interest rate buydown funded by a seller concession might make sense. The simplest explanation of this strategy is that the buydown subsidizes a reduced monthly mortgage for the first one or two years of the mortgage.

Goal #3:  Lowest Interest Rate for the Term of the Mortgage

If this is a property that you expect to own for many years, it makes sense to ask for a seller concession that is utilized to buy the interest rate down on your mortgage for its full term.

So, the next question is, what is a reasonable dollar amount for a borrower to request from the seller as a concession? Each borrower and seller circumstance will vary, so there is no set rule, although Fannie Mae and Freddie Mac underwriting guidelines limit the seller to a contribution of 6% of the sales price (or 3% if the borrower is making a minimum down payment).

Seller concessions may only be utilized to offset closing costs, reduce the interest rate on a temporary or permanent basis, or to prepay mortgage insurance on behalf of the borrower. Seller concessions may NOT be used to reduce the down payment made by the borrower.

It might surprise a prospective buyer to understand the different impacts that a seller concession versus a price reduction can have on the monthly cost of their mortgage. And it might surprise sellers to learn that offering a concession in the form of an interest rate buydown can increase the pool of prospective buyers.

I am happy to explore buyer and seller wants, needs, and goals. Structuring a seller concession so that both buyer and seller benefit is possible once all parties agree upon the anticipated appraised value of a property. Of course, this is best done with the assistance of an experienced Realtor like me who knows how to evaluate the market trends in a particular community.

    If you are buying or selling and have questions about the different possible concessions, call Jaxzann at 303-990-2992.

How Concerned Should Homebuyers Be About Fed Interest Hikes?

It is no surprise that headlines like “Fed Hikes Rates” may discourage prospective home buyers, but they should not be discouraged. Jaxzann Riggs, owner of The Mortgage Network, explains why.

The “Federal Reserve” is the central bank of the United States. Founded by an act of Congress in 1913 with the primary purpose of enhancing the stability of the American banking system, the “Fed” is charged with helping to set “monetary policy” for the United States. It sets the “federal funds rate” which is the interest rate that banks charge each other to borrow or lend excess reserves overnight.

“Monetary policy” refers to the actions undertaken by the Federal Reserve to influence the availability and cost of money and credit offered to consumers and businesses to help promote national economic goals. 

You may have also heard the term “quantitative easing.” Quantitative easing (QE for short) is a policy or strategy which has recently been used by the Federal Reserve. During the COVID pandemic, the Federal Reserve not only cut the “Fed funds” rate to zero but it also purchased mortgage-backed and other financial securities to increase the supply of money for homeowners. This encouraged more lending to consumers and businesses. While the result of the policy remains to be seen, most economists suggest that it caused mortgage rates to be held artificially low. The combination of low rates and low housing inventory (construction of new homes fell dramatically following the 2007-2008 fiscal crisis) created the “inflation” of home values with which we are all familiar.

Some assume that the Federal Reserve sets mortgage rates… they do not, but they do influence mortgage rates. The Fed controls short-term interest rates (mortgage rates are long-term rates) by increasing them or decreasing them based upon the state of the economy. When the economy is struggling, the Fed lowers the rates, allowing banks to borrow money at a lower rate to lend to consumers. When the Fed decides the economy may be overheating (read inflation) they tighten the money supply by raising the Fed funds rate. While this does not directly increase mortgage rates, lenders must eventually do the same to keep up with their costs to borrow money from the Federal Reserve.

On July 27th, the Federal Reserve announced a three-quarter percent interest rate hike, and during that week the average 30-year fixed mortgage rate fell one quarter of a percentage point. When there is talk of the Fed raising their rate, mortgage rates can spike, but they typically correct by the time that the increase is actually announced.

Recent positive unemployment figures may cause the Fed to raise rates once again, but the Fed’s chairman, Jerome Powell, has also indicated that there may be a pause on future increases in order to assess their impact on the economy.

We all know that higher rates reduce purchasing power for buyers, but there have been some positives to higher rates. Fewer buyers in the market mean that inventories are rising, and sellers are willing to help buyers with “interest rate buydowns.” Buying at the right price is important, but asking the seller to help with the cost of an “interest rate buydown” instead of offering a lower purchase price will have much more impact on a buyer’s monthly mortgage payment. (Click here to read my July blog post on the topic of interest rate buydowns.) Buyers are qualified for monthly mortgage payments versus loan amounts, so reducing the rate on your new home loan increases your buying power.

If you have lending questions about your personal circumstance, Jaxzann Riggs is standing by. You can reach her on her cell phone at (303) 990-2992.

Mortgage Interest Buydowns Can Benefit Both Buyers and Sellers  

Interest rates have doubled in the last year. Buyers have reduced buying power at higher rates, and sellers are seeing their listings take longer to go under contract. Lowering the list price is one strategy to entice buyers, but that makes a nominal difference in terms of the monthly payment for a prospective purchaser. 

I talked with Jaxzann Riggs at The Mortgage Network to learn how buying down the interest rate can take the sting out of rising rates and more importantly, how sellers might employ the offer of a buydown to increase the number of offers received.

There are two types of buydowns — temporary and permanent, and each has its own benefits, but the MOST important thing to know about buydowns is that they can be paid for by either the buyer or the seller.

Let’s look at both options for a fictitious buyer.  Rebecca is interested in a house that is listed for $695,000. She is planning on putting 20% down, and her mortgage broker quoted her a rate of 5.454%, with a monthly P&I payment of $3,141. This payment is a little above what Rebecca was hoping for, so she is thinking about asking the seller to assist with the cost of an interest rate buydown.

Temporary buydowns allow the seller or the buyer to contribute money to an escrow account for the benefit of the buyer at the time of closing. A portion of the escrow is used each month to reduce the borrower’s payments for a set amount of time.  A  “2-1 Buydown” is a common option that decreases the interest rate for the first two years of the mortgage. The rate is 2% lower the first year, and 1% lower the second. While the buyer’s mortgage contract is always going to reflect the note rate, the buydown escrow is used to pay the remaining interest balance each month. To ensure that she can afford the full monthly payment, she must qualify for the loan based on the note rate.

In Rebecca’s scenario, a 2-1 buydown will cost $11,968, and would lower her first year’s monthly payments to $2,482, equivalent to an interest rate of 3.454%. This is a monthly savings of $659, which will be paid out of the buydown account. The second year she will pay $2,802 monthly, comparable to a 4.454% rate, with a savings of $339 a month. The third year she will have exhausted the subsidized funds and she will pay the full payment of $3,141 for the remainder of the loan. While the effects of this option only last a couple of years, the monthly savings are significant and for borrowers who anticipate increases in income, this can make home ownership more of possibility.

Permanent Buydowns allow the rate to be “bought down” for the life of the loan. “Points” are paid to the lender at the time of closing in exchange for a lower rate for the life of the loan. While the monthly savings aren’t quite as dramatic as with the temporary buydowns, the benefit will continue throughout the life of the mortgage. 

For Rebecca, the dollars that she would spend for a temporary buydown, $11,968 would buy her rate down to 4.796% for 30 years, lowering her monthly payments to $2,968, saving her $157 a month versus a payment based upon a current rate of 5.45%.  Again, this buydown could be paid for by the seller instead of lowering their sale price, to make their listing more attractive to more buyers.

The bottom line is that buydowns make sense for some.  And sellers who are willing to participate in the cost of buydowns will dramatically increase their buying pool.

If you would like more information about buydowns, call Jaxzann at (303) 990-2992.

With the Rise in Mortgage Interest Rates, ARMs Are Making a Comeback and Can Save You Money

As mortgage interest rates rise, many potential homebuyers have asked me about the wisdom of using an adjustable-rate mortgage loan (often referred to as an ARM) to finance their home purchase. 

Adjustable-rate mortgages, also known as “variable-rate mortgages” are mortgages that offer a low introductory interest rate for a specific period of time. The borrowers’ interest rate and correspondingly their monthly principal and interest payment will be “locked in” for the first five, seven, or ten years. For example, a 10/6 ARM means that you will pay a fixed interest rate for 10 years, then the rate will adjust every 6 months. A 7/1 ARM, on the other hand, means that your rate will be fixed for 7 years and then the rate will adjust every year.

Because the lender is not “locking in” the interest rate for a 30-year period, the borrower is sharing in the risk associated with rising rates. In exchange for the ability to increase the borrowers’ rate based upon future market conditions, lenders offer lower rates for ARMs than they do for 30-year fixed rate loans. The lowest ARM rates are offered on shorter terms, as an example, a 5-year ARM will have a lower rate than a 10-year ARM. The difference in today’s pricing for a 5-year ARM versus a 30-year fixed rate is approximately .75%, with a 5-year ARM being offered at 4.25% and a 30-year fixed rate loan being offered at 5.00%

Borrowers considering an ARM should know which index will be used to calculate their new interest rate, as well as the “margin” that will be added to the indexed rate to determine the “fully indexed interest rate” at the time of adjustment. While this might seem extraordinarily risky, all loans offered thru FNMA and FHMLC (and most jumbo lenders as well) “cap” the increases that can occur at each adjustment period as well as the maximum amount that the rate may increase over the life of the loan. Unlike the ARMs of previous years, borrowers are not allowed to make partial interest payments, so there is no risk of the loan amount increasing as the rate increases.

The most obvious benefit to choosing an ARM is lower monthly payments. While homebuyers will have to qualify for the loan based on the future higher payment price, they can take advantage of the lower payments by investing the savings somewhere with higher gains, making home improvements, or adding more to the principal balance to pay off the loan more quickly.

ARMs are typically best suited for borrowers who do not anticipate that they will still own the home at the time of the initial adjustment or those who anticipate increases in income that will keep pace with interest rate increases. If a borrower’s circumstances change, there is always the option to refinance into a fixed rate loan. Unlike ARMs of the past, there are no longer prepayment penalties to dissuade the borrower from refinancing once the initial fixed interest rate ends. If you decide to refinance from an ARM to a fixed-rate mortgage, the refinancing process is straightforward and is similar to when you purchased your home. When you refinance, you take out another loan that is used to pay off your original note, then your new payments are based upon the new loan.

As the housing market continues to change, Jaxzann Riggs, owner of The Mortgage Network, is available to answer questions and help you decide which loan options are best suited for your current needs.

You can reach out to Jaxzann with any questions at 303-990-2992.  Mention that I suggested you contact her.

Overdue Medical Bills? Upcoming Changes Will Improve Your Credit Score  

Your credit scores affect nearly every facet of your financial life. And it’s no secret that life is better with a good credit score. Good credit makes it easier to buy a car, rent an apartment or get a home loan. 

Jaxzann Riggs, owner of The Mortgage Network, shared with me some important changes that will likely improve many consumers’ credit scores.

While many potential homeowners do their homework and check their credit scores prior to applying for a loan, they are often surprised when they sit down with a mortgage broker, who informs them that the credit scores appearing on their “tri-merged, residential credit report” are significantly lower than those obtained thru consumer online sites. For some, this could mean that their house hunting is going to have to wait. 

Bank sites and Credit Karma may give you a good picture of your “consumer” credit score, but when mortgage lenders review your credit history, they use a credit score formula tailored to determine what kind of risk you’ll be for a mortgage loan. The formula weighs pieces of your credit history differently to test for such risk factors as debt collections that have been paid off. The score is tailored to mortgage lenders because it’s specifically focused on your ability to repay a home loan, versus an auto loan or credit card. With credit scores, the higher the score, the lower the mortgage interest rate. For borrowers with a credit score under 740, lenders factor the additional risk into your interest rate.

What impacts different scores? Mortgage lenders typically use a FICO score (by Fair Isaac Corporation) to determine your loan options. Your FICO score is based on many things such as your amounts owed, length of credit history, and your payment history. Payment history alone accounts for 35% of your FICO score, which looks at late payments, unpaid balances, or accounts that have gone into collections. While you may have paid off the collection shortly after a notice, unfortunately, those negative records can stay on your FICO report for a long time!

A collection account, no matter what it is owed for and no matter what the amount, can easily drop a credit score 100 points or more, depending on what the rest of the credit report looks like. According to the Consumer Financial Protection Bureau’s research, 58% of collections on a consumer’s reports are medical. And as of June 2021, the amount of medical debt on consumer credit reports was $88 billion dollars

Good News Has Arrived

Starting July 1st, the three large credit bureaus — Equifax, Experian and TransUnion — will stop including medical debt that went to collections on credit reports after it’s paid off. Under current practice, it can remain on your record for seven years.

Additionally, consumers will get a year, up from six months, before unpaid medical debt appears on credit reports once it goes to a collection agency. And in the first half of 2023, the credit bureaus will stop including anything that has a balance less than $500.

What does that mean for your FICO score? Well, that is a good question! While we know that the changes will positively affect many people, we don’t know the extent to which it will change the mortgage FICO scores until the changes go into effect.

If you have questions about your credit scores or report, get in touch with Jaxzann at 303-990-2992. She will also answer any other mortgage loan questions that you may have. 

Amid Today’s Rising Interest Rates, Let’s Revisit the Concept of Buying Down Those Rates  

With mortgage rates rising and many homebuyers believing that now is the time to buy, anything that can reduce the cost of a mortgage is worth looking into. Many savvy homebuyers are asking about discount points, wanting to know what they are and whether it makes sense to buy them.

Mortgage points, often referred to as discount points, let you make a tradeoff between your upfront costs and your monthly payment. By paying points, you are essentially buying down the interest rate. You pay more upfront, but you receive a lower interest rate, decreasing your monthly payments.

The cost of one discount point is equivalent to 1% of the total mortgage. In other words, if you had a $400,000 loan, the cost of purchasing one discount point would be $4,000. Lenders typically allow a borrower to purchase up to three discount points, and they can also be purchased in increments of one-half point.

The specific amount that an interest rate will be reduced with the purchase of points varies from loan to loan but can be thought of as a 0.25% rate reduction for each point purchased. Thus, if you had an initial interest rate of 5% and purchased 3 discount points, your new interest rate would be 4.25%.

How do you know if it makes financial sense to pay for points? The first step is to calculate how long it will take for the decreased monthly payments to pay for the added upfront fee. This is called the “breakeven point.” You can determine when you will break even by dividing the total cost of the discount points by the monthly savings. The answer will be the number of months it will take. Divide this number by 12 to find the number of years it will take.

Here’s an example to show how it would work for you. The cost of buying down the rate from 5% to 4.25% on a $400,000 loan would be $12,000. The difference in the monthly principal and interest (“P&I”) payment between 5% and 4.25% would be $178 per month ($2,138 P&I at 5% versus $1,960 P&I at 4.25%). If you are spending $12,000 to save $178 per month, you will need to own the property for 67 months to break even.

If you were to sell the home or pay off the loan (including by refinancing) in the first 5½ years, you would not be reaping the full benefit of your rate buy-down from buying points.

On the other hand, if you bought down the rate to 4.25% and stayed in your home for thirty years, the difference in monthly payments over the life of your 30-year loan would be $64,080. Subtracting the initial investment of $12,000, you would be left with savings of roughly $52,000. As you can see, whether paying points makes sense for you depends primarily on one major factor — how long you think you will keep your home and/or the mortgage on it. If you don’t plan to keep your home for very long, or plan on refinancing soon, it may not benefit you to purchase points.

Purchasing a home is a major financial step. If you aren’t sure how long you will be in the property, you may decide that the money spent on points would be better spent on furnishing or fixing up the property, or by simply investing it in another financial instrument that will gain value over time.

Jaxzann Riggs of The Mortgage Network helped me with this column. You can reach her at 303-990-2992 for more information about points and to discuss whether they may be right for your personal financial journey.