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Old 08-27-2008, 12:44 AM
 
Location: Cary, NC
1,036 posts, read 3,628,866 times
Reputation: 503

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Quote:
Originally Posted by solanoMan View Post
I was quoted with an interest rate 0f 6.5% with 1 discount point yesterday and 7.0% with no discount point. So by paying a point, the interest rate was decreased by .5%. If I buy 2 points will it reduce it to 6.0%? I don't know if this is how it's calculated? If this is their game then I would like to play it. I'll probably buy 3 points to reduce it to 5.5%

The buy down option is not documented anywhere. It was just verbal but our agent was there. We have no documents for the loan up to now. We just have the GFE from yesterday and today.

Your agent should really have negotiated this better or informed you of your rights and the risks. You signed a contract that pretty much tied you to a lender without a GFE, TIL and other terms in writing first?

Verbal cues, nods and winks are great... but in the end its the documents that will matter. Their lender should have pre-approved you for a loan PRIOR to you agreeing to purchase the loan. As part of that approval, you should have had rates, terms and fees disclosed.

What if it had been 4 points to get the 6.5% rate? And no, rates are not linear. Because 1 will get you .5% lower rate, does not always mean 2 will get you 1% lower rate. Ask, you never know...
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Old 08-27-2008, 01:26 AM
 
35 posts, read 140,058 times
Reputation: 23
Should I buy discount points to lower the rate or pay for the prepaid items (property tax, insurance)?
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Old 08-27-2008, 03:22 AM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,100,246 times
Reputation: 952
Is this truly a discount point or is it an origination point? 6.625% with 1 discount point seems awfully high to me, but I couldn't definitively say without seeing the file obviously.
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Old 08-27-2008, 08:42 PM
 
35 posts, read 140,058 times
Reputation: 23
I know it's high. They want their 12500 closing credit back.

So I was quoted today with a 6.375% interest rate with 1.625 discount point. If I take this offer, the closing cost will be all covered by the 12500 closing credit from the builder.

The other quote is for 6.875% with no points with 10 months of property tax prepaids and home insurance. The closing cost will also be covered by the closing cost credit.

Which should I take?
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Old 08-28-2008, 09:46 AM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,100,246 times
Reputation: 952
Quote:
Originally Posted by solanoMan View Post
I know it's high. They want their 12500 closing credit back.

So I was quoted today with a 6.375% interest rate with 1.625 discount point. If I take this offer, the closing cost will be all covered by the 12500 closing credit from the builder.

The other quote is for 6.875% with no points with 10 months of property tax prepaids and home insurance. The closing cost will also be covered by the closing cost credit.

Which should I take?
If the discount point is being paid by the builder I would take that one.
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