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What would it cost be to buy down the interest rate from 4% to 0 on a $500,000 home price?

by dale.s_963_386 from Riverside, California. Jul 6th 2012 Reply


Bert Carpenter (BertCarpenter)
#37 ranked lender in Arizona - 2,431 contributions

More than likely, more than you can afford or are willing to pay. All investors have a floor that they will not allow the rate to be bought below. Today for my pool of investors, the lowest rate you could buy down to is 3.25% for a 30 year loan. That would cost you 1.5 points. ~ Bert Carpenter, The LoansA2z Team of NOVA Home Loans. NMLS 40586 ~ 888-889-9950

Jul 6th 2012
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Home Benefit (HomeBenefit)
#634 ranked lender in California - 4 contributions

Not that I know a bank that would go for it, but in a hypothetical world, I'd estimate about 7 years worth of interest.$500,000 x .04 x 7 = $140,0007 years seems to be the break even to recover the cost of paying a point by having reduced monthly payments over that many years.

Jul 6th 2012
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#58 ranked lender in Georgia - 807 contributions

Zero percent is not even on a rate sheet...buying a point sounds more realistic to 3%

Jul 7th 2012
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