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mka06
LIF Adult
Member since 8/06 1079 total posts
Name:
Melis
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mortgage question
can someone explain the "point" concept as it relates to mortgages? thanks!
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Posted 5/31/07 2:03 PM  |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: mortgage question
a point = 1% of the loan amount.
so if they are charging you a point to buy down the rate, it will cost you 1% of your mortgage amt as a fee (If your mortgage is $300,000, one point is $3,000.)
HTH
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| Posted 5/31/07 2:18 PM |
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mka06
LIF Adult
Member since 8/06 1079 total posts
Name:
Melis
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Re: mortgage question
Posted by Meaghan729
a point = 1% of the loan amount.
so if they are charging you a point to buy down the rate, it will cost you 1% of your mortgage amt as a fee (If your mortgage is $300,000, one point is $3,000.)
HTH
it does help. but - one more question - does that fee become part of your mortgage or do you pay it out? tia
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| Posted 5/31/07 2:21 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: mortgage question
Posted by mka06
Posted by Meaghan729
a point = 1% of the loan amount.
so if they are charging you a point to buy down the rate, it will cost you 1% of your mortgage amt as a fee (If your mortgage is $300,000, one point is $3,000.)
HTH
it does help. but - one more question - does that fee become part of your mortgage or do you pay it out? tia
you can do either. its best to pay it up front, since then you wont be paying off $3K for thirty years.
if you put it itno the mortgage, it will count against your LTV.
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| Posted 5/31/07 2:23 PM |
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LaurenExp
Waiting patiently for baby sis
Member since 8/06 11613 total posts
Name:
L-Diddy EDD 11/11/11 :)
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Re: mortgage question
I have also heard that if you don't have intentions on staying in your house for more than 10 years, then buying points is pointless (no pun intended  )
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| Posted 5/31/07 2:26 PM |
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JldDolphin
Member since 1/07 6929 total posts
Name:
Jen
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Re: mortgage question
Posted by LaurenExp
I have also heard that if you don't have intentions on staying in your house for more than 10 years, then buying points is pointless (no pun intended )
That is true. We just went through this recently and our broker kept asking us if we planned on being in the house for more then 5-10 years. It doesn't pay off if you are staying for 5-10 years.
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| Posted 5/31/07 2:31 PM |
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mka06
LIF Adult
Member since 8/06 1079 total posts
Name:
Melis
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Re: mortgage question
thanks!!
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| Posted 5/31/07 2:52 PM |
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mommy2Alex
3 babies for me :)
Member since 5/05 6683 total posts
Name:
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Re: mortgage question
Posted by JldDolphin
Posted by LaurenExp
I have also heard that if you don't have intentions on staying in your house for more than 10 years, then buying points is pointless (no pun intended )
That is true. We just went through this recently and our broker kept asking us if we planned on being in the house for more then 5-10 years. It doesn't pay off if you are staying for 5-10 years.
Our breakeven point for 1 point was 3.5 years so we went for it. You have to see how much you save each month and then divide that by the cost of the point to determine the b/e pt.
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| Posted 5/31/07 5:15 PM |
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ckone
LIF Adult
Member since 8/06 3014 total posts
Name:
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Re: mortgage question
Posted by mommy2Alex
Posted by JldDolphin
Posted by LaurenExp
I have also heard that if you don't have intentions on staying in your house for more than 10 years, then buying points is pointless (no pun intended )
That is true. We just went through this recently and our broker kept asking us if we planned on being in the house for more then 5-10 years. It doesn't pay off if you are staying for 5-10 years.
Our breakeven point for 1 point was 3.5 years so we went for it. You have to see how much you save each month and then divide that by the cost of the point to determine the b/e pt.
I agree. If we buy a point then we would break even between 3.5 - 4 years. I plan on never moving again.
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| Posted 5/31/07 9:07 PM |
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Pumpkin1
LIF Adult
Member since 12/05 3715 total posts
Name:
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Re: mortgage question
Please let me know if this is correct:
A mortgage for $417K is at 6.25% with 0 points. If I pay 1 point, that would be $4,170 upfront and a rate reduction to 5.25%?
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| Posted 6/5/07 8:10 PM |
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MegZee
My bunny
Member since 5/06 8777 total posts
Name:
Meaghan
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Re: mortgage question
Posted by Pumpkin1
Please let me know if this is correct:
A mortgage for $417K is at 6.25% with 0 points. If I pay 1 point, that would be $4,170 upfront and a rate reduction to 5.25%?
you will pay $4,170, but it will only reduce the rate 0.25%.
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| Posted 6/5/07 8:23 PM |
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