Refinancing

[dawgball]

Just jumping in here -

Been looking at solid rates myself - was looking at 4.75% +0 on 15 year fixed for a while

And as far as paying points, I disagree with the notion that it always hurts you - right now there is a growing spread b/t rates you can get with no discount points and rates you can get paying 1% - I've seen loan scenarios recently where borrowers can get 4.75% +1 on a 30 year fixed but would have to pay up to 5.5% with no points

Jack, not sure who was teaching your RE class but if you're going to be in a house for a long period of time and can save $200 a month for paying $$ up front, at the end of the day you are much better off paying that point!!


GL to all and if anyone would like me to check rates for them search the web for Gulf Coast Bank in Louisiana and look under Mortgage Lenders - my name is Scott L...... and you should be able to access my contact info - I am licensed to sell mortgages in all of the Continental US


Thanks - LA Burns

My guess is that it would never make sense if it is an investment piece of real estate; not primary home. I wonder if that was lost in translation.

 

[LA Burns]

Here's the way I look at it dawgball -


If you are planning on keeping a piece of property (be it primary residence or investment property) for an extended period of time, it may very well make sense to pay a point to buy rate down


If you can get 5% +1 or 5.5% +0, there will be at some time a break even point - if you're loan amount is 200k and the point costs $2k, then there will come a time in the life of the loan where the monthly savings based on the lower rate will pay you back the $2k - from that point on in the loan you are working with the monthly savings based on the lower rate


There are many variables to consider, but to say that you should NEVER buy a point IMO is a mistake - and as mentioned earlier there is a growing spread b/t rates you can access w/out points and rates you can access w/ playing a point - so I'll leave you with this hypothetical question....


If you could get, let's say, 6% +0 or 3.5% +1, would it then make sense to buy the point? Of course it would

Now that scenario will almost definitely never present itself, but just trying to exemplify what I'm talking about in regard to a growing spread b/t rates with points and w/out and why you really can't unilaterally say that you should NEVER buy a point on a loan



Burns

 

[dawgball]

Here's the way I look at it dawgball -


If you are planning on keeping a piece of property (be it primary residence or investment property) for an extended period of time, it may very well make sense to pay a point to buy rate down


If you can get 5% +1 or 5.5% +0, there will be at some time a break even point - if you're loan amount is 200k and the point costs $2k, then there will come a time in the life of the loan where the monthly savings based on the lower rate will pay you back the $2k - from that point on in the loan you are working with the monthly savings based on the lower rate


There are many variables to consider, but to say that you should NEVER buy a point IMO is a mistake - and as mentioned earlier there is a growing spread b/t rates you can access w/out points and rates you can access w/ playing a point - so I'll leave you with this hypothetical question....


If you could get, let's say, 6% +0 or 3.5% +1, would it then make sense to buy the point? Of course it would

Now that scenario will almost definitely never present itself, but just trying to exemplify what I'm talking about in regard to a growing spread b/t rates with points and w/out and why you really can't unilaterally say that you should NEVER buy a point on a loan



Burns

I agree with you completely. I'm thinking this was a real estate investment class.

Much of your success in REI is based on cash on hand + cash flow. I was only looking for a possible reason that this instructor would be so strong on his opinion about this.

If the right deal was presented, I would buy point(s) if the math made sense to me.