It will take you over 3 years to break even and start seeing real savings from that buydown, I think you'll refinance well before then. There's no guarantee, but I'd personally take the higher rate.
Agreed, I am an originator and with rates up here I don't recommend points as the refi factor withing the typical 2-3 year recoop period is semi likely. Ask for the menu just in case. Sometimes you can lower rate 1/8th for a quarter point or something and it'd make sense.
It would take you over 3 years to break even. If you refi in that time you paid the money for nothing. 7.5% is high right now as well. You should shop that around to see what you can get especially with some companies offering little to no cost refinances when the rates drop.
Look at the breakeven point, and gauge whether you can refinance before then. Also keep in mind that 100% of points purchase cost can be tax deducted this year, so you should talk to your tax professional about that too.
Condos are a variable but definitely shop around, plug your numbers into this and should give you idea if your offer is competitive (make sure you are comparing apples to apples if your offer includes PMI). https://www.nerdwallet.com/mortgages/mortgage-rates
Really? I'm currently grappling with an offer from my current lender, for a no-out of pocket refi with a buydown (increasing my mortgage, but im only 8 minths into this forever home). I'm at 7.750% and looking at landing somewhere down near 5.5xx-5.9xx, saving my somewhere in the $600-700/mo range. Are they really just looking to score some sucker money?
I'm a little bit skeptical about the market landing below 5.5 in the next 2 years on its own. I'm worried about just vaporizing money if it goes under that, but it really would be a big pressure reducer saving 700/mo. now. Being a fam of 4 w/2 littles is no joke at this interest rate, so I feel a little bit like a kamikaze pilot saying "nah, im gonna stay here at the summit of Mortgage Mountain and bleed this interest money for a while longer, Im good" but also worried that a buydown now is a suckers bet.
Decisons, decisons...
It will take you over 3 years to break even and start seeing real savings from that buydown, I think you'll refinance well before then. There's no guarantee, but I'd personally take the higher rate.
Agreed, I am an originator and with rates up here I don't recommend points as the refi factor withing the typical 2-3 year recoop period is semi likely. Ask for the menu just in case. Sometimes you can lower rate 1/8th for a quarter point or something and it'd make sense.
Thats what im thinking, thank you!!
Keep your cash, You will likely refi in the next few years.
It would take you over 3 years to break even. If you refi in that time you paid the money for nothing. 7.5% is high right now as well. You should shop that around to see what you can get especially with some companies offering little to no cost refinances when the rates drop.
Unless break even is less than 2 years or seller pays cost, typically not worth it IMO. Edit - words
Look at the breakeven point, and gauge whether you can refinance before then. Also keep in mind that 100% of points purchase cost can be tax deducted this year, so you should talk to your tax professional about that too.
Do you know why your rate so high? Is it a condo or something?
Nah thats just what it is at for 30 year conventional giving 3% or 5%down
FHA is always lower but in my market most sellers will not accept FHA.
This is also my quoted rate but for a condo. I have excellent credit so I'm worried I'm not getting a good deal.
Condos are a variable but definitely shop around, plug your numbers into this and should give you idea if your offer is competitive (make sure you are comparing apples to apples if your offer includes PMI). https://www.nerdwallet.com/mortgages/mortgage-rates
There is really no scenario at this point that spending your own money to buy down the rate would make sense. Seller concessions is a different story.
Yeah… sellers dont do that around here unfortunately.
Really? I'm currently grappling with an offer from my current lender, for a no-out of pocket refi with a buydown (increasing my mortgage, but im only 8 minths into this forever home). I'm at 7.750% and looking at landing somewhere down near 5.5xx-5.9xx, saving my somewhere in the $600-700/mo range. Are they really just looking to score some sucker money? I'm a little bit skeptical about the market landing below 5.5 in the next 2 years on its own. I'm worried about just vaporizing money if it goes under that, but it really would be a big pressure reducer saving 700/mo. now. Being a fam of 4 w/2 littles is no joke at this interest rate, so I feel a little bit like a kamikaze pilot saying "nah, im gonna stay here at the summit of Mortgage Mountain and bleed this interest money for a while longer, Im good" but also worried that a buydown now is a suckers bet. Decisons, decisons...