I’m debating to go for lower rate with point vs higher rate without point. On paper option 1 makes more sense as it saves me $170/month so break-even period will be 5 1/2 years. We are planning to stay in current property longer than that unless there is any unforeseen reason.
Is there any reason to not pay down point ? 2.5% for jumbo loan seems too good to pass, If rates further fall in future, it may not make sense to re-fi again.
Closing cost 11K (Including point)
11K will be added to loan amount.
Monthly payment: 4433
Closing cost covered by lender
Monthly payment: 4605
My friend locked at loan depot (730k loan home of 1.2M) with 2.375% with $2000 one time fee as point. This is 30 year fixed, he locked yesterday.
Thanks Jill, My loan amount is higher hence not qualified for conforming loan. Lot of the lenders are currently not re-financing jumbo loan. I’m seeing better rates for loan less than 750K amount.
In general, I don’t buy points if I think rates are going down and will re-finance 2-3 years later.
How low could it get, 2.5 seems really low but year ago I thought 3.125 was low as well
Refinance when it makes sense to you.
I did 3 months ago at 2.8 that I thought the lowest I am happy with it.
No one really know how low it gets but for sure rate will stay low next couple years according to the Fed.
There is a break even point. For my friend, they said 2.5% with no point or 2.375% with $2000 as point. With this he was telling some break-even happens 12 months. If he is not refinancing for 12 months, he is fine.
Conforming limits are rising into the 822k range in about 3 weeks. Might be worth waiting.
You have to break even in 2 yrs or less. Anything longer is throwing $$$ away.
Thanks for reading
I do not have full details. However, he locked it with 2.375% for 30 year fixed.