I’m an avid reader and have been since I was little--my mom made sure of that. She taught all three of her kids how to read before we went to kindergarten, still not entirely sure how she managed that. There were lots of flashcards involved. She also used some classical conditioning techniques by consistently pairing trips to the frozen yogurt shop with trips to the library. Needless to say, I loved going to the library. And I still do. The concept of it is amazing--you get to borrow books without paying anything (unless they’re returned late of course--an entirely separate topic). No upfront fees, no interest, you just check out the book and leave. Wouldn’t it be lovely if banks were like libraries? “Well, Mr. Smith. Here’s your loan of $150,000. Now, we won’t be charging you any closing fees, transaction fees, or interest--so don’t you worry about a thing. Just bring it back when you can. Oh, and have a good day!” Perhaps the single most wonderful phrase in that entirely impossible and never-going-to-happen dialogue is the part about no interest. Simply put, interest can be defined as the price you pay to borrow money from the bank. (They don’t let you borrow it for nothing like the library). Many real estate investors have come to recognize interest as one of the largest expenses associated with real estate--and rightly so. But there are ways to lower your interest rate. Those who can make a 10% down payment, who have good credit, and who can prove their income/assets are much more likely to be quoted with a lower rate. Another option is to pay Discount Points. These are fees paid up front and based on the amount you want to borrow. Basically, the more you pay up front in such fees, the more you can buy down your interest rate. Always get at least 3 quotes from your lender, each representing different amounts of discount points including maximum amount of discount the lender allows. And keep in mind that the first couple of discount points paid will most greatly affect the interest rate; paying for additional points after that might not be beneficial considering how little they actually affect the interest rate. So while we can’t alter the banking system into a kinder library system (the results of doing so would be catastrophic to the market), we can do our best to secure the lowest interest possible.