- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Should I buy Mortgage Points
Posted on 5/10/19 at 3:48 pm
Posted on 5/10/19 at 3:48 pm
Currently getting offered a rate @ 4.25. I can be 1/4 of a point for around $800 to get it @ 3.99
4
Posted on 5/10/19 at 3:53 pm to LSUbase13
This would depend on a few different things.
1. How large the mortgage is going to be
2. How long you plan on living in the house
For example... On a $400k mortgage you'd be spending $800 to save $60/month so you'd save money if you stayed in the house for over a year (13 months). I'm guessing the mortgage is smaller than that and the "pay back" term would be a good bit longer. Generally, it isn't worth paying points but the longer you stay the better the chances that it is worth it.
1. How large the mortgage is going to be
2. How long you plan on living in the house
For example... On a $400k mortgage you'd be spending $800 to save $60/month so you'd save money if you stayed in the house for over a year (13 months). I'm guessing the mortgage is smaller than that and the "pay back" term would be a good bit longer. Generally, it isn't worth paying points but the longer you stay the better the chances that it is worth it.
Posted on 5/10/19 at 4:07 pm to yellowhammer2098
I’ve heard of this but not familiar.
Wouldn’t paying additional to principal during the loan do the same thing?
Wouldn’t paying additional to principal during the loan do the same thing?
Posted on 5/10/19 at 4:57 pm to LSUbase13
To me that would be a no brainer. If they are really offering .25 discount points to lower the rate by.25% take it. the .25 discount points would breakeven in just 16 months without taking into account Time Value of Money. Even taking into account TVM you would break even in 16-18 months.
The only reason you would not want to do that is if you plan on selling the house within 18 months and if that is the case you shouldn't be buying in the first place more than likely.
The only reason you would not want to do that is if you plan on selling the house within 18 months and if that is the case you shouldn't be buying in the first place more than likely.
This post was edited on 5/10/19 at 5:02 pm
Posted on 5/10/19 at 5:17 pm to Chad504boy
quote:
buy 4 of them.
Posted on 5/10/19 at 5:35 pm to HYDRebs
quote:you know how much he's borrowing?
To me that would be a no brainer
Posted on 5/10/19 at 5:55 pm to castorinho
C, I want to buy .25 points on a 4.25% 30 year fixed, borrowing ~$400k, right? Would cost me $3k. Will be in the house for awhile.
Posted on 5/10/19 at 6:27 pm to castorinho
quote:
You know how much he’s borrowing?
Yes I do, per his initial post if 1/4 of a discount is $800 his loan amount is $320k. Quite frankly though it shouldn’t matter what his loan amount is.
Posted on 5/10/19 at 10:14 pm to GynoSandberg
quote:
C, I want to buy .25 points on a 4.25% 30 year fixed, borrowing ~$400k, right? Would cost me $3k. Will be in the house for awhile.
Looks like that should pay out in a little over three years.
quote:duh
Yes I do, per his initial post if 1/4 of a discount is $800 his loan amount is $320k.
I'm an idiot. Posted on 5/11/19 at 11:31 am to HYDRebs
quote:
To me that would be a no brainer. If they are really offering .25 discount points to lower the rate by.25% take it. the .25 discount points would breakeven in just 16 months without taking into account Time Value of Money. Even taking into account TVM you would break even in 16-18 months.
quote:
The only reason you would not want to do that is if you plan on selling the house within 18 months and if that is the case you shouldn't be buying in the first place more than likely.
The market in Mt. Pleasant/Charleston is really, really good right now. I know I could sell and most likely make a little money after fees and expenses. That said, we had our first child 6 months ago, and are buying with the outlook of staying 7-10 years.
That said, I agree with you in that it is likely a "no brainer" to buy the points.
Posted on 5/13/19 at 10:27 am to LSUbase13
have you considered doing a 15 year instead of a 30 year or looked at the numbers on it?
Posted on 5/13/19 at 7:16 pm to yatesdog38
quote:
have you considered doing a 15 year instead of a 30 year or looked at the numbers on it?
quote:
yatesdog38
Why not just buy the rate down on a 360 term as low as possible and then have the broker work up an amortization schedule based on the 180 month term and then make one and a 12th payments per month? You’re handcuffing yourself with a locked in monthly financial obligation on the shorter amortization.
God forbid something happens and your income is affected. But in my scenario you could dial the payment back to 30 year term and give yourself a break while you weathered the storm.
15 year terms never make sense to me. I’m not saying that there isn’t a market or customer for that paper. But it’s just doesn’t make sense in a lot of ways.
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News