Members Svi Posted December 18, 2008 Members Share Posted December 18, 2008 So we bought a house and locked in yesterday at 4.875, which is a killer rate. However, we have to pay a point since our credit score was 15 points off from their best rate. If we don't pay a point (2,000) the rate jumps to 5.25. Does this make any sense to anyone? Did we do the right thing by locking at 4.875 with a point? Link to comment Share on other sites More sharing options...
Members txbass68 Posted December 18, 2008 Members Share Posted December 18, 2008 Pay the extra. It will save you in the long run. A point is usually 1% of the saling price of the house. Link to comment Share on other sites More sharing options...
Members Perfessor Posted December 18, 2008 Members Share Posted December 18, 2008 I think points are deductible interest as well. Link to comment Share on other sites More sharing options...
Moderators ThudMaker Posted December 18, 2008 Moderators Share Posted December 18, 2008 IMO, right thing. Over the course of time the almost 1/2 percent in interest will make a difference. Congrats on the house, btw. Link to comment Share on other sites More sharing options...
Members Svi Posted December 18, 2008 Author Members Share Posted December 18, 2008 IMO, right thing. Over the course of time the almost 1/2 percent in interest will make a difference. Congrats on the house, btw. Thanks We got an awesome deal. The math made sense to me but my dad kept giving us crap for paying the point. Link to comment Share on other sites More sharing options...
Members Perfessor Posted December 18, 2008 Members Share Posted December 18, 2008 Thanks We got an awesome deal. The math made sense to me but my dad kept giving us crap for paying the point. Call the IRS and find out about the deduction and then tell yer dad to shut his yap! You got an historically great interest rate.... Link to comment Share on other sites More sharing options...
Members bnyswonger Posted December 18, 2008 Members Share Posted December 18, 2008 If you plan on being in the home for more than 3 or 4 years, it was money well spent. Link to comment Share on other sites More sharing options...
Members Svi Posted December 18, 2008 Author Members Share Posted December 18, 2008 If you plan on being in the home for more than 3 or 4 years, it was money well spent. Oh, for sure! With the way the market has been we were able to get a huge house instead of a "starter house". It appraised for 30K more than we bought it for. It has four bedrooms, plenty of room for all the little munchkins Andy wants me to pop out Link to comment Share on other sites More sharing options...
Members BottomHeavyKate Posted December 18, 2008 Members Share Posted December 18, 2008 Congrats!!! With the way things are going - I'm thinking there are going to be some very good deals next year when I start looking.... Link to comment Share on other sites More sharing options...
Members slapthefunkyfour Posted December 18, 2008 Members Share Posted December 18, 2008 Congratulations! That's funny, I was talking with my wife on the way to work today about refinancing our house. We got a 6.5% loan, and we might be able to get it a little lower. Wow. Exactly one year ago tomorrow we closed on our first house! Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted December 18, 2008 CMS Author Share Posted December 18, 2008 Thanks We got an awesome deal. The math made sense to me but my dad kept giving us crap for paying the point. As long as you did the math on it, you're good. Points are nothing more than interest paid up front (as if you aren't already going to be paying it 'up front'...your first couple years will be paying 90+% interest in every payment:mad:) so as bnyswonger points out, be sure you're staying there a while. Points (on a primary home) are tax deductible, as are most of the closing costs. Buying at this time of year is good...you get to take the closing and points off your 2008 return, and all that nasty interest next year. Good luck in the new digs! Oh, and get a big manila envelope, and save the receipts for your home improvements. Next year you can sort through them and deduct the ones that are tax deductible. Stuff like insulation, weatherstripping etc are deductible. See your tax pro. Link to comment Share on other sites More sharing options...
Members citizenralph Posted December 18, 2008 Members Share Posted December 18, 2008 So we bought a house and locked in yesterday at 4.875, which is a killer rate. However, we have to pay a point since our credit score was 15 points off from their best rate. If we don't pay a point (2,000) the rate jumps to 5.25.Does this make any sense to anyone?Did we do the right thing by locking at 4.875 with a point? Congratulations! Where's abouts did you buy? Link to comment Share on other sites More sharing options...
Members Crescent Seven Posted December 18, 2008 Members Share Posted December 18, 2008 In your situation, paying the point isn't that big of a deal. It was a big deal when home values were starting to really get inflated a couple of years ago, and people were stretching everything to get into a house. If it only cost you $2k, that's peanuts if you have $30k in built in equity. Buyer's market indeed. Congrats, btw. Now you get the joys of home ownership. Shoveling your own walks, mowing your own grass, replacing the water heater and furnace, fixing all of your own leaks, property tax, and the pleasure of telling your neighbors to {censored} off if they don't like the color you paint your garage door. C7 Link to comment Share on other sites More sharing options...
Members Super_Donut_Man Posted December 18, 2008 Members Share Posted December 18, 2008 So we bought a house and locked in yesterday at 4.875, which is a killer rate. However, we have to pay a point since our credit score was 15 points off from their best rate. If we don't pay a point (2,000) the rate jumps to 5.25. Does this make any sense to anyone? Did we do the right thing by locking at 4.875 with a point? you done good. Link to comment Share on other sites More sharing options...
Members Rusty the Scoob Posted December 19, 2008 Members Share Posted December 19, 2008 Thanks We got an awesome deal. The math made sense to me but my dad kept giving us crap for paying the point. Tell your dad that I've worked in the mortgage industry for almost 10 years in nearly every possible capacity. I paid a point when I bought my house, and with no regrets. Unless you're flipping it or the rate decrease is very small, it's money well spent. Link to comment Share on other sites More sharing options...
Members Perfessor Posted December 19, 2008 Members Share Posted December 19, 2008 Tell your dad that I've worked in the mortgage industry for almost 10 years in nearly every possible capacity. I paid a point when I bought my house, and with no regrets. Unless you're flipping it or the rate decrease is very small, it's money well spent. Flipping is so......mid 2000's! Link to comment Share on other sites More sharing options...
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