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Was it a local lender? Or was it through an internet bank? I was not aware that a 30 year fixed had dropped down to below 5%. I'll take your word for it, but what I would really like to take is an appointment with the person who got you that rate. Mind sharing their contact info via Direct Message?
I would also love to know this! Any chance I could get a DM with this information as well?
It was through a nationwide mortgage lender. The problem is the rates have gone up since I locked in and my rate is no longer available. Like Coltank said a couple of posts ago it was only available for one day so calling around isn't going to do anybody any good now. And people say Pres. Bush hasn't done anything good. I thank him and Clark Howard for my rate!
Nope, it's not a typo. 4.875% and that's a 30-year fixed mortgage with zero points (Clark says to never pay points on a mortgage.). We locked in about a month ago when the rates took a dive that lasted only a day or two. I'm an avid listener of the Clark Howard show (search the name if unfamiliar) and owe a lot of my financial stability to him (My latest craze Clark taught me is how to use the same razor for a year! Search his website and he'll tell you how!)! I heard about the rate drop on his show and immediately locked in the rate and we closed this morning!
I'm not a financial expert by any means but "never pay points"? What if you could pay down 4.875%??? (And I know that is a huge what if).
I'm not a financial expert by any means but "never pay points"? What if you could pay down 4.875%??? (And I know that is a huge what if).
Pay now, pay later--you just have to figure out the numbers and what works for your situation. I know some people not only expect to live in the house for the 30 year length of their loans but they also expect never to refinance their loan, so paying discount points perhaps make sense.
Me? I don't expect to live more than 10 years in a specific house and would probably refinance within this term; it doesn't make any sense to pay points on a 30 year fixed mortgage product.
Pay now, pay later--you just have to figure out the numbers and what works for your situation. I know some people not only expect to live in the house for the 30 year length of their loans but they also expect never to refinance their loan, so paying discount points perhaps make sense.
Me? I don't expect to live more than 10 years in a specific house and would probably refinance within this term; it doesn't make any sense to pay points on a 30 year fixed mortgage product.
I agree.
Points are calculated over the life of the loan, and few people will stay in a home 30 years, or not refi within that time.
Points are calculated over the life of the loan, and few people will stay in a home 30 years, or not refi within that time.
Right, the numbers have to work out for the situation you're planing, just looking at mine it would take me ~ 6 years to recoup the cost of a buy down.
I'm speaking specifically about the case of someone with a 4.85 rate; I've never been quoted a rate that low so I have no clue if it's even possible to buy that down (I imagine the chances are small if any). For me, I don't believe the prospect of a refi significantly below 4.85% would happen in the future and then I'd need to factor in the cost of the refi as well.
I agree with most of what you (Mike and Jinx) are saying, what I am in most disagreement with is the previous statement that one should NEVER pay points.
Right, the numbers have to work out for the situation you're planing, just looking at mine it would take me ~ 6 years to recoup the cost of a buy down.
I'm speaking specifically about the case of someone with a 4.85 rate; I've never been quoted a rate that low so I have no clue if it's even possible to buy that down (I imagine the chances are small if any). For me, I don't believe the prospect of a refi significantly below 4.85% would happen in the future and then I'd need to factor in the cost of the refi as well.
I agree with most of what you (Mike and Jinx) are saying, what I am in most disagreement with is the previous statement that one should NEVER pay points.
Never say "Never?"
Agreed!
Rates have been reasonably volatile for years. "Reasonably" meaning moving within a range.
I could have refi'ed at 4.75 in 2005, but got greedy, and rates popped to 5.375 before I got smart.
I told Mrs. we need to be on our toes, looking for the next opportunity.
Points are calculated over the life of the loan, and few people will stay in a home 30 years, or not refi within that time.
To clarify this:
On a purchase, the points paid are 100% deductible in the year purchased.
When refinancing, the points paid are deductible over the life of the loan. A 30 year loan equals yearly deductions of the entire amount of points paid divided by 30. If the mortgage is paid off early, as when sold, then the balance of the points can be deducted in that year.
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