MarketWatch.com has released a new survey showing paying upfront discount points to reduce their interest rate doesn't save borrowers money. One discount point is equal to one percent of the loan balance. Upfront discount points can be paid at the time of closing to reduce the interest rate on the loan.

Borrowers need to balance the cost of the upfront money compared to the savings over time of the lower interest rate. The new survey indicates that most people over-estimate the length of time they will hold onto the loan or actually own the house and are not able to recoup the benefits of the lower interest rate.

Will you be buying Ringwood NJ real estate in 2007? If so, contact me and I will be glad to assist you with your calculations in determining if paying discount points is a good decision for you.