Really cmkeller? I certainly wouldn’t consider something that happened in 1980 as recent…
My hubby and I move a lot.
Part of the deal with the firm he works for is that they pay all of the closing costs on both ends plus 2 1/2 points.
This allows us to save some serious cash, especially if you figure that we’re not going to be in any one place for more than a few years, enabling us to take a 5 yr fixed (Prime +2 thereafter) mortgage w/o risk. Currently, our mortgage is at 6.25%. On our “jumbo”, it makes a helluva difference.
Plus it’s exceedinly fun when telemarketers call to see if we want to refinance.
“Can you beat 6.25%?”
“Uh…thank you for your time.”
Sue, you are obviously not undersatnding my point which is that you are really not paying 6.25% and, in fact you are paying a higher rate plus a prepayment penalty. If you give me the numbers I’ll tell you exactly what you are paying.
As an example: $100000 loan, 2.5 points, 6.25% interest, 360 months equals 0 points, 6.49% interest. If you pay it off at the end of 72 months the equivalent prepayment penalty is $2035. Of course, if someone else is paying then that’s another thing alltogether. But you pay for points.
Sailor, you are obviously NOT understanding MY point. We ARE paying 6.25% because the FIRM paid the points. Hence, it’s a great deal for US.
I said it was anecdotal, I wasn’t disagreeing with you.
Sue, I wasn’t disagreeing with you either. Sorry if I sounded that way. If someone else pays, that’s always a good deal. No question about it.
IIRC, my mortgage is 6.5% on a point and a half. According to my brother, the one-time IRS auditor, more points results in quicker accumulation of equity and a larger tax deduction. Having owned the condo only since October, I have yet to build up much equity, thus took just a standard deduction this year.