mortgage

mobil1syn

mobil1syn

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May 19, 2020
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any reason not to buy the points and refi? the math says im cash ahead over the life of the loan, but my brain keeps saying it cant be that easy.
 
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if you can get an under 2% rate, you should do it. that is as close to free as we are likely to see and is certainly below inflation over even the next 15 years. money is getting pushed, take advantage of it
 
We refinanced a few months back. Buying points wouldn’t have gained us much of anything. Nicest part was cutting our 30 year loan to a 15 year loan and dropping PMI.
 
I went from a 15 year (12 years left) at 3.625 to a 10 year at 2.5% with no points. Knocks two+ years off the term and saves me about $28k in interest. Don't accept their first offer.
 
buying the points is really only beneficial if you are going to let the loan go to full term and just make the minimum payments. if you plan on paying it off early, by paying lump sums or extra each month, you might find you'll save the difference in the interest and it gets eaten up again by the $3700 point buying.
 
The reason points look like they make sense and the reason that banks are willing to sell them is that they are gambling that you will not stick out the loan term. I'd bet over 90% of people move and/or refi well before the points pay off and in that case the bank wins.

If you are 100% sure you are doing neither of those things before the loan is payed off then buying the points could make money. It's really a gamble though because circumstances can change overnight for even the most stable of us.
 
crazybluerider said:
The reason points look like they make sense and the reason that banks are willing to sell them is that they are gambling that you will not stick out the loan term. I'd bet over 90% of people move and/or refi well before the points pay off and in that case the bank wins.

If you are 100% sure you are doing neither of those things before the loan is payed off then buying the points could make money. It's really a gamble though because circumstances can change overnight for even the most stable of us.
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based on the online calculators, it would take about 8yrs for the points to make sense. i do not anticipate moving any time soon and with a 1.99% rate refinancing wouldnt make sense.
 
Pony_Driver said:
Who did you guys refinance through?
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referral from my buddy who is a realtor. used him to refi last year to drop PMI, drop over a point and move to a 20yr loan. realtor posted on facespace loans were under 2% so i check with the refi guy and here were are. will probably go with the 2.5% and no points.
 
damn, i just finished refinancing. These rates are crazy Started early June. We locked in around 3-3.5% for a 15 and were happy, now I wish I procrastinated longer :( Chase was slow as shit to process - stayed with them because it's who it was and thought the process would be smoother. Should have shopped around..

Dropped from a 4.8% 30yr to a 3-3.5% 15yr. Much better, especially since the extra payments we were putting were essentially paying a 15yr anyway, but damn i'd love to have that extra % point off.


don't think we bought any points. Interesting to hear the return comments though. my back-of-the-napkin math said I'd be about $30k ahead after 4 years equity wise after the Refi, after closing costs.
 
Our employee Credit Union is offering refi's at 2.25%. There are 6 people that sit in my office, 3 of us are refinancing and 1 just bought a new house at this rate.
 
Dang I want those rates. I'll have to start shopping. I was happy at 3.25

Buy points if you can afford it. Aren't they tax deductible?
I didn't pay enough mortgage interest last year to deduct so was looking at refi anyway.
 
mobil1syn said:
referral from my buddy who is a realtor. used him to refi last year to drop PMI, drop over a point and move to a 20yr loan. realtor posted on facespace loans were under 2% so i check with the refi guy and here were are. will probably go with the 2.5% and no points.
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I just checked with my favorite broker based on your post.. she hasn't seen rates that low (she's in MN)... and said take it.
 
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