Each point costs a fee equal to 1 percent of the loan amount and typically reduces your mortgage rate by about one-eighth of a percentage point. So if you're borrowing $250,000 and the standard interest rate is 4.00 percent, you can buy a point for $2,500 and reduce your rate to 3.875 percent.
How much should you save every month? Many sources recommend saving 20 percent of your income every month. According to the popular 50/30/20 rule, you should reserve 50 percent of your budget for essentials like rent and food, 30 percent for discretionary spending, and at least 20 percent for savings. We agree with the recommendation to save 20 percent of your monthly income.
You should also deposit money into your savings regularly. Think of it as paying yourself first. Many banks allow you to set up automatic deposits from your paycheck, which makes this easier for you. At the same time, you need to keep a close eye on your balance.n order to save more, you have to start spending less and we have a few ways to help grow your savings. Start by watching your spending. Those everyday purchases can add up. If you track how much you spend in certain areas, you might realize you need to make changes, like not eating out as much or shopping less.