http://www.bankrate.com/finance/mortgages/mortgage-points.aspxCan someone explain what points are and their purpose? A link would be great.
Yeah, that's what finally woke my broker up when I started rattling off numbers given by my credit union. Deal got MUCH better, REAL quick.
Dang. On $250K, 32% of the first payment is principal.Pulled trigger on my new house. 30 yr, 3.85, 20%, no points. It's absolutely AMAZING what the amortization tables look like.
Dang. On $250K, 32% of the first payment is principal.
Can someone explain what points are and their purpose? A link would be great.
Points are basically you paying a percentage of the interest up front. It makes your loan rate "seem" lower, when you're really just being scammed.
Typically, 1 point = 1% of the loan amount. So a mortgage of $100k would cost you $1,000 per point due at closing. Most people trying to refinance would typically roll that up into the loan amount and end up tacking it on with the closing costs. If the loan beats the terms of your current mortgage, you can do that and still come out saving a lot of money.
Points are basically you paying a percentage of the interest up front. It makes your loan rate "seem" lower, when you're really just being scammed.
Typically, 1 point = 1% of the loan amount. So a mortgage of $100k would cost you $1,000 per point due at closing. Most people trying to refinance would typically roll that up into the loan amount and end up tacking it on with the closing costs. If the loan beats the terms of your current mortgage, you can do that and still come out saving a lot of money.
Welcome. Now go buy a house and help the economy and your wallet.Thanks guys.
Pulled trigger on my new house. 30 yr, 3.85, 20%, no points. It's absolutely AMAZING what the amortization tables look like.
Once you lock in your rate and move forward, if the rate drops more can you readjust or would you be stuck at that rate without starting over?
What does the 20% part of this mean?
down payment to avoid PMI.
3.85% is crazy good. It's sick that the housing market is still in the shitter though. People want to rent instead because of job instability.
down payment to avoid PMI.
3.85% is crazy good. It's sick that the housing market is still in the shitter though. People want to rent instead because of job instability.
My neighbor is going to rent his paid for house out and use the 1500/month rent to buy a home 4 times bigger because of the rates so low. So his renters would be paying for his house that's much bigger and nicer.
Jesus.... That would be like having 40 grand laying around for me.
Not an option. I don't think I could really re-fi based on closing costs and such.
My neighbor is going to rent his paid for house out and use the 1500/month rent to buy a home 4 times bigger because of the rates so low. So his renters would be paying for his house that's much bigger and nicer.
well people have that money from many sources... could be if you're upgrading to a house, what you've sold gives you some cash. You could borrow short-term from close relatives. Could be from gambli... errr.. the stock market. But yeah if you've always rented, you've been throwing money out the window.
Stay away from brokers and big banks.
In general small local bank (with good reputation) or a credit union is much better.
The biggest problem with brokers is
a) 99% scumbags and VERY few good ones
b) in most cases you won't know who your bank is until closing (if you care, I do)
c) too many use bate/switch tactic
I just tell people to stay the hell away/get rid of the middle man