When in doubt – take the loan with no points, no fees and no closing costs. Deciding between a "0 points, 0 fee, 0 closing cost loan" and one that has a large upfront payment but a lower monthly payment is a difficult decision for everyone but an expert using a computer program to figure it all out. To simplify this evaluation process and save money in the process steer clear of all upfront fees especially those that are added to your mortgage balance. It is true that after 5 to 10 years you may be better off having paid those fees – but who knows what will happen in 5 to 10 years! Interest rates could drop, which eliminates any benefit of the fees you paid. Or you could move, or refinance for other reasons – again eliminating any benefit of the fees you paid.

To keep it simple, reduce risk, and save you possibly $5,000 or more – get a zero point, zero closing cost, zero fee loan that DOES NOT add these fees to your principle. You may pay a little more in an interest rate but you are likely to have more net worth to show for it in 10 years.

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