You as the borrower, will see an advantage in paying discount points with the benefit of lowered interest rates. However, keep in mind that it’s important to see the loan through to the end in order to benefit from the decreased monthly payments and make up for the cost of the points.
Lenders also benefit from this since they get money upfront instead of waiting for monthly interest payments. It also means that if you default on the loan, they don’t suffer as much of a loss.
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