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Paying a "point" on a mortgage loan....

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  1. cizastro cizastro is offline

    Tanzania, United Republic of

    Posts: 6,812
    Joined: Nov 08

    Sep 1st, 2010 (9/1/2010 6:23am)

    Hoping to find some lenders up in OT...so here's my question..

    I'm purchasing an investment property. The lender lady came over the other night and on her paperwork she showed me that we're paying a point to buy down the interest rate. Being that it's an investment property, the interest rate is higher (around 5.75 right now). Do you need to pay a point up front to get a good interest rate or is that just something they add on to make more money for them?

    I don't remember paying a point the last time I got a loan, so I just want to make sure she's not taking an extra $1200 out of my pocket just to fill hers....please advise!
  2. railbot railbot is offline

    Miami, FL
    United States

    Posts: 5,249
    Joined: Oct 07

    Sep 1st, 2010 (9/1/2010 6:54am) in reply to cizastro

    It's all spelled out on the hud1, when u go to close.
    What's comission to her and what's a buydown.
    If You wanted a good rate she's prolly buying it down,
    but it generally lowers ur payment by something less than $50 a month.
    I won't ask ur ficos
    or w/e since I haven't done a loan since I got locked up.
    ask her what's ur par rate?
    And what's the % being shifted down for ur buydown.
    Paying $1200 to shift ur rate down .25
    is kinda wizackz
  3. Joshole Joshole is offline

    Phoenix, AZ
    United States

    Posts: 166
    Joined: Jul 06

    Sep 1st, 2010 (9/1/2010 7:20am) in reply to railbot

    sounds fine...1 point = 1k 10 years ago when I bought my place
  4. ShortyJacksn ShortyJacksn is offline

    United States Minor Outlying Islands

    Posts: 5,986
    Joined: Dec 06

    Sep 1st, 2010 (9/1/2010 7:39am) in reply to Joshole

    5.75% and you are paying points?

    Without knowing the rest of your scenario, it sounds like you're not getting the best deal that you could.

    PM me and we can talk offline tomorrow. I am a mortgage lender in CA. I'll make sure your rate/fees are legit.
    Edited By: ShortyJacksn Sep 1st, 2010 at 07:41 AM
    Reason: changed my last sentence without correcting the dreaded "you're"
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