Hi, I was offered a 4.75 fixed loan for $1270 a month and have to pay at closing $300. However, my other option is to get 5% and at closing get $900 back. I need to lock in the rate what do you recommend?

Not enough information to give you an honest answer only to say a .25% difference in the interest rate cost you about $15.17 per month/per 100,000 so it would not take long to reach the 800 then you would be loosing. Hope that helps.Jack C.dependableinc@yahoo.com734-395-9027

I agree with above reply. But also, a .25% difference in the rate, depending on the size of the mortgage, could be a sizeable amount of interest payments between the two rates.

I think that's plenty of information. Go with the 4.75%. If you don't have the $300 you have no business buying a home. ... Happy funding, Rudi

Rates change everyday. Your indecision likely cost you this opportunity as rates are worse now than when you were offered that deal. Either way, you should have locked in because when you lock, you can still decide what to do later because you are locking that day's rates. My advice would be to take the 4.75!

Your loan amount looks like $243,500, as that equates to a payment of $1,270 at 4.75%. So, the payment at 5.0% is $1,307. Thus, you save $37 a month by choosing the lower rate.To save $37, you are giving up $600, so your break-even point is only 16 months.This is how the analysis should be done. I would recommend the 4.75%.

I must make a correction - I just noticed it was $900 back, so you are giving up $1,200. Your break-even is now $1,200/37 = 32 months. Your call.

Go with the 4.75% rate and pay the $300. To figure out your savings and confirm my recommendation, subtract the difference in payments and divide it by $600 (cost of lower rate differential). This will give you the number of months you need to stay in the house to breakeven by going with the lower rate.

4.75% will save you $300 worth of interest in the first 6 months!Gianni Cerretani SENIOR MORTGAGE BANKER"Old fashioned business done with modern day thinking"Main Line: 678-381-2272 xt. 229 Direct: 678-381-2264 Cell: 404-213-9663 Fax: 888-275-1833gianni.cerretani@fcmhomeloans.com www.fcmhomeloans.comwww.homesforheroes.comwww.micennasmission.us First Community Mortgage Inc., a Division of First Community Bank"Putting the Needs of the Community FIRST" 1455 Lincoln ParkwaySuite 260 Atlanta, GA 30346