Corporations and humans go through a similar decision-making process when buying assets.

In this case, you are buying a house and your mortgage company/bank offers to let you buy a "point" (1% of the loan amount) to reduce your APR from 6.5% to 6.25% on your 30-year mortgage. You can pick any mortgage amount between $200,000 to $1,000,000.

Explain when you would/should buy the point and when you would/should not buy the point for the three scenarios below if:

A) If you plan to be in the house for less than 5 years?

B) If the plan is to be in the house for 5 -15 years.

C) If the plan is this is your "forever" home. This means you have the mortgage for the full 30 years.

Include your calculations.

Instructions:

Your response should be answered with Fundamental Financial merits along with your experiences and opinions. Please share your experiences and opinions.