Re: Mortgage refi question

[lessel]

I'm bad at this y'all and I need an assist. Basically, our refi has two options and I can't figure out which way to go. Both are 20-year mortgages. Right now we're in a 30-year with PITI at $2600.


PDQ details

Option 1:
3.0% 
$728 purchase points
$0 lender credit
$1750 cash to close
$2,785 PITI

Option 2:
3.125%
$0 purchase points
$1650 lender credit
$-650 cash to close
$2,809 PITI

It seems like over the life of the loan, option 1 saves us about $5-6k, but that savings costs $1750 now, so negates roughly half of it. 

But again, I'm not good at this. Help?

[madisen]

Depending on what the % on the 'purchase points' is, I can tell you if that's a cheap, expensive, or standard buydown between 3.125% to 3%.

I recommend the mortgage calculaters on dinkytown.com to put the two scenarios in and check numbers.

After all of that, I think it's preference and your own current needs for cash now.

[lessel]

Mar 18, 2020 11:11:34 GMT -5 madisen said:

Depending on what the % on the 'purchase points' is, I can tell you if that's a cheap, expensive, or standard buydown between 3.125% to 3%.

I recommend the mortgage calculaters on dinkytown.com to put the two scenarios in and check numbers.

After all of that, I think it's preference and your own current needs for cash now.

Sorry, the form I'm looking at says "discount points." No more info than that. Other than the differences noted above, the rest of the fee worksheets are identical.

I'm trying not to bug my broker with questions because he's beyond swamped.

[twilightmv]

How long do you plan to have the house?

[twilightmv]

This is DH's area. He recommends option 2, since over the life of the loan the savings is minimal.

[lessel]

Mar 18, 2020 11:49:39 GMT -5 twilightmv said:

This is DH's area. He recommends option 2, since over the life of the loan the savings is minimal.

Thanks! We're planning on being in the house right around 20 years (roughly until our youngest is out of high school), which is why we went for this term. 

Even though we have the cash to swing the lower rate, give the particular moment we're at in the world, keeping what cash we can seems like a good idea.

[madisen]

Mar 18, 2020 11:18:11 GMT -5 lessel said:

Mar 18, 2020 11:11:34 GMT -5 madisen said:

Depending on what the % on the 'purchase points' is, I can tell you if that's a cheap, expensive, or standard buydown between 3.125% to 3%.

I recommend the mortgage calculaters on dinkytown.com to put the two scenarios in and check numbers.

After all of that, I think it's preference and your own current needs for cash now.

Sorry, the form I'm looking at says "discount points." No more info than that. Other than the differences noted above, the rest of the fee worksheets are identical.

I'm trying not to bug my broker with questions because he's beyond swamped.

The LE should always include discount points in points/% and in $s.