Comments on: Mortgage Rates Are Low, But It May Still Cost You

By: Chris

Chris — Mon, 02 Mar 2009 23:58:00 +0000

I’m in the midst of mortgage shopping right now, and was quoted a fairly decent rate I think.

I’m a FTHB, purchasing a new construction condo in CT, so I don’t have many options for lenders. I’ve got a 90% LTV, credit scores all north of 780, and my only monthly liability is a small college loan repayment. However, I was given a rate of 5.375% last week, a but higher than I expected, but again my options are limited.

However, for the cost of 0.875 points on the loan, my rate is only being reduced to 5.125%. How does Julian come to the conclusion that 1 point would buy down the interest rate by 0.625% or 0.875%? I’m still getting close to that historical level. I can’t really believe that statement.

Is this something negotiable with banks? This is why people think mortgage points are a bad thing. I’d rather get rid of PMI than save $30-$40 per month. Howeverm you take down my rate by 0.625%…. NOW we’re talking!

By: Kelley

Kelley — Thu, 26 Feb 2009 21:58:23 +0000

Very timely post, Jeremy. My husband and I are in the midst of refinancing, or taking out a home equity line of credit, to replace all the windows in our c1948 home. We’ve been offered some very attractive rates (4.99%, 5.125%), but the $3-4,000 in closing costs is making us pause. We anticipate we’ll need less than $25,000 (I’ll know more tonight after we receive our first window quote), so I’m leaning towards the HELOC instead, as a way to borrow what we need without closing costs.

By: Jim@refinance-today

Jim@refinance-today — Thu, 26 Feb 2009 15:55:22 +0000

I think you have a good point and people should be Very careful when looking at the cost of refinancing to a lower interest rate, even if their credit is top notch.

Anyway you look at it, refinancing can be a good thing but it still comes down to the extra cost and if it’s cheaper in the long run.

Good post for everyone considering their options.

By: Shadox

Shadox — Thu, 26 Feb 2009 03:16:59 +0000

Yeah, I agree – interests rates may be low but actually getting your hands on a mortgage is a whole ‘nother ball game…

By: My Life ROI

My Life ROI — Wed, 25 Feb 2009 23:02:04 +0000

I am not in the market for a new house… I am fine in my current situation. That being said I have not researched all that goes into buying a house.

This was an amazingly simple and useful breakdown of “points.” I always hear it, never have cared to figure it out.

Thanks!