Points...good or bad?

im aware of how points work and need to sit and do some calculations but i wanted to ask to see how those that have gone trough the process (or going to be) feel about points...

1% (1 point) at 260k is not alot and would help us with payment. we plan on moving on from our first house in about 5 to 6 years and would probally refinance after 2 years...

what do you think... she also said a point and a half would be good also to bring me to 6%. we dont have poor nor great credit..we fall in the middle. i thought 6% is fair with the 5 1/2 rates going to 1st teir credit people

thanks

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Posted by am470

bad

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can you explain please?

So, did you make an offer?


We bought points for out first mortgage.

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Posted by peabody

So, did you make an offer?


We bought points for out first mortgage.

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We are ready to make offers on 2 properties... hopeing that 1 of them will work out. (1 condo and 1 house - both in central islip)

well, with differerent brokers checking our credit out, we were also told 6%... we never got anything lower then 6 (off a pre-qual)
so these rates are soughta like a estimate.
i could see reason with the rate being higher then avg cause of the amount of debt we carry. i will ask to see if i can break 6 any how (with or without points)

its a charge to drop your rate thus reducing your monthly mortage

so you are paying more to pay less... a point = 1 %... (this is my understanding of it, i may be wrong)

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Posted by nov04LIbride

We bought a point and a half, and had put down 20%. We bought a year ago, so the rates were a little different, but that brought us down a bit in terms of the percent for the mortgage. I think for us they said the points will pay for themselves if we stay in this place for 3 or more years. There didn't seem to be minuses if you can afford it.

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hmm...so in your situation, if i stayed 5 years (which is the plan), the points would benefit us in the long run....

i guess i really need to compare the two, side by side

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Posted by MCDO15

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Posted by nov04LIbride

We bought a point and a half, and had put down 20%. We bought a year ago, so the rates were a little different, but that brought us down a bit in terms of the percent for the mortgage. I think for us they said the points will pay for themselves if we stay in this place for 3 or more years. There didn't seem to be minuses if you can afford it.

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hmm...so in your situation, if i stayed 5 years (which is the plan), the points would benefit us in the long run....

i guess i really need to compare the two, side by side

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Exactly. Our mortgage broker figured out our payments per month for the next 5 years with and without the points. The payments are less, but it would take 3 or 3 1/2 years for us to save the amount that we pay upfront with the points. We were planning on 3-5 years so we were OK with that. Plus, our place already went up $60,000 in a year, so even if we wanted to sell now, we would still make quite a bit.

I don't think it's safe to count on your property value going up. I mean, it can, but it could also just stay the same, or it could decrease a bit and stay like that.

If you do pay points, remember to list it when you file your taxes. It's supposed to be tax deductible.

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Posted by violet

I don't think it's safe to count on your property value going up. I mean, it can, but it could also just stay the same, or it could decrease a bit and stay like that.

If you do pay points, remember to list it when you file your taxes. It's supposed to be tax deductible.

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its safe to say value increase (besides the fact we plan on an extension to the property)...the area is be being redone... very soon, target and home depot will be less then 3 miles from the house and my aunt lives around the corner which gave me an idea of how her property increased over the years.

That's great.

Which property do you want more?

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Posted by MCDO15

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Posted by violet

I don't think it's safe to count on your property value going up. I mean, it can, but it could also just stay the same, or it could decrease a bit and stay like that.

If you do pay points, remember to list it when you file your taxes. It's supposed to be tax deductible.

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its safe to say value increase (besides the fact we plan on an extension to the property)...the area is be being redone... very soon, target and home depot will be less then 3 miles from the house and my aunt lives around the corner which gave me an idea of how her property increased over the years.

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Oh in that case, it's fine. I thought you were just thinking because the prices are always going up, that you're depending on it.

That's why I want to get a house that needs work but is livable. To assure increased value. As long as it's cosmetic things. I could have gotten a house that needed a replaced roof ASAP and had signs of termites and that sounded like a money pit to me when termite damage can be really expensive.

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Posted by violet

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Posted by MCDO15

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Posted by violet

I don't think it's safe to count on your property value going up. I mean, it can, but it could also just stay the same, or it could decrease a bit and stay like that.

If you do pay points, remember to list it when you file your taxes. It's supposed to be tax deductible.

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its safe to say value increase (besides the fact we plan on an extension to the property)...the area is be being redone... very soon, target and home depot will be less then 3 miles from the house and my aunt lives around the corner which gave me an idea of how her property increased over the years.

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Oh in that case, it's fine. I thought you were just thinking because the prices are always going up, that you're depending on it.

That's why I want to get a house that needs work but is livable. To assure increased value. As long as it's cosmetic things. I could have gotten a house that needed a replaced roof ASAP and had signs of termites and that sounded like a money pit to me when termite damage can be really expensive.

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Off the point, I know, but our house had termite damage when inspected and the previous owner had to repair it or they wouldn't get the certificate to pass on to the bank so we could get our mortgage.

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Posted by IrishBride-05

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Posted by violet

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Posted by MCDO15

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Posted by violet

I don't think it's safe to count on your property value going up. I mean, it can, but it could also just stay the same, or it could decrease a bit and stay like that.

If you do pay points, remember to list it when you file your taxes. It's supposed to be tax deductible.

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its safe to say value increase (besides the fact we plan on an extension to the property)...the area is be being redone... very soon, target and home depot will be less then 3 miles from the house and my aunt lives around the corner which gave me an idea of how her property increased over the years.

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Oh in that case, it's fine. I thought you were just thinking because the prices are always going up, that you're depending on it.

That's why I want to get a house that needs work but is livable. To assure increased value. As long as it's cosmetic things. I could have gotten a house that needed a replaced roof ASAP and had signs of termites and that sounded like a money pit to me when termite damage can be really expensive.

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Off the point, I know, but our house had termite damage when inspected and the previous owner had to repair it or they wouldn't get the certificate to pass on to the bank so we could get our mortgage.

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Ours wasn't going to repair it if there were any damages nor pay for the anti-termite treatment. Nor pay for the roof. It should have been priced as a handyman special.

1 point is not equal to 1% I beleive it is and 1/8th of a percentage We had the option to buy points and said no and got a 5.99 for a jumbo but that was in May/early hune.