The most economically beneficial rate is not always the lowest rate. It takes about 58 months for the monthly savings to offset the increased closing costs. Conversely, if the loan is paid prior to the 58th month, the borrower has spent money unnecessarily. Hence, using APR as the sole criterion for selecting a rate is unwise. In comparing APR's, you must consider how long you expect to have your mortgage.
Some borrowers use discount points as part of their overall tax strategy.
Don t forget, however, that the lower interest rate will affect future tax savings. Other equally important considerations are addressed in our Shop for Value section. Ensure the loan officer you select has both the ability and the desire to provide you with competent service and current information.