Best Mortgage Rates

Finding the highest mortgage rate may not be as easy as looking the lowest interest rate available.   A mortgage shopper should start by asking how long they plan to hold onto the mortgage and own the property. There is no reason to consider the option of paying points and fees to buy down the interest rate when a borrower does not plan to own the property long enough to re-coup (or at least break even) on the closing costs.  The second thing that should be used in determining whether to buy the interest rate down by paying point and fees, is whether a borrower is refinancing (refinance mortgage rates) or purchasing the property in question. 

When refinancing, points and fees have a different tax treatment than if the transaction involves a purchase.  Deducting points and fees typically has a more favorable tax treatment in a purchase transaction rather than in refinancing when the deduction of points is normally amortized over the life of the loan and not deducted in the year they are paid as is typically the case in a purchase.