Mortgage Points, also known as discount points, are a form of prepaid interest that borrowers can pay at the closing to lower the interest rate. Each point typically costs 1% of the total loan amount. Here are some key points to consider when evaluating the value of mortgage points:

1. Interest rate reduction: Paying points upfront can lead to a lower rate over the life of the loan. The more points you pay, the lower the interest rate. However, it’s crucial to calculate the break even point to determine how long it will take to recoup the upfront cost through the interest savings.

2. Loan duration: If you plan to stay in the home for a long time, paying points might be beneficial. The longer you hold the mortgage, the more you can save on interest payments by having a low interest rate.

3. Upfront cost vs. monthly saving: Consider your financial situation. Paying points means higher closing costs. If you have sufficient funds and can afford the upfront expense, the potential monthly savings on your mortgage payment can be advantageous in the long run.

4. Tax Implications: Mortgage points are generally tax deductible in the year you purchase your home, provided certain criteria are met. Speak with your accountant to understand how points may affect your tax situation.

5. Future plans: Consider your future financial goals and plans. If you anticipate refinancing or selling your home soon paying points may not be worthwhile, as you might not stay in the home long enough to recoup the upfront cost.