Financing Points that are financed in a mortgage such as buy-down or discount points that are added to your mortgage balance. There are advantages and disadvantages of financing points.

The advantage to paying points is that you can lock a lower interest rate on your mortgage loan. Because the interest rate is an important factor in calculating the monthly payment, you end up reducing your monthly payment by paying points. As you plan and make financial arrangements for the years to come , you may find that you’d like to have a lower monthly mortgage payment. One way to achieve this is by paying points.

Finally, you may get some tax breaks by paying points. Depending on your transaction, you may get tax benefits in the year you pay points, or over a number of years. If you can have enough money to pay the points, you’ll need to figure out if it’s worth it. The longer you keep the loan, the more you save by paying points. To find out if it's worth it consider the following:
1.Figure out how many points you can pay
2.Find out how much any choice would reduce your monthly payment
3.Consider how many months of reduced payments you could enjoy
4.Decide whether it looks like it’s worth it

The main disadvantage is that you are paying a higher rate than you would be paying if you had paid points and closing costs. If you keep the loan for long enough, you will pay more––since you have higher mortgage payments. In the scenario where you plan to stay in the house for more than 5 years, and if rates never drop for you to refinance, you could wind up paying more money. If, on the other hand, you plan to stay at a property for just 2-3 years, there really is no disadvantage.