Can one lock in a rate for a 30yr fixed?
Say it is currently 7.00%; to lock it to 6.00%
would it take $1000 (like a point); or more like
$2000?,$5000, or what amount? Is that how it
works? Thanks, Ron ()
In article <>,
"ront2" <> wrote:
> Can one lock in a rate for a 30yr fixed?
> Say it is currently 7.00%; to lock it to 6.00%
> would it take $1000 (like a point); or more like
> $2000?,$5000, or what amount? Is that how it
> works? Thanks, Ron ()
In general, on a 30 year fixed, each discount point
lowers the loan rate by 1/8. So, to go from 7% down
to 6%, you have to pay 8 points. On a $100,000 mortgage,
that would be $8,000. But, if this is a new mortgage
(ie, not a re-fi), you can deduct the points 100% the
first year of the loan, so if you are in the 25% bracket,
you would get $2,000 back on your taxes.
-john-
--
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John A. Weeks III 952-432-2708
Newave Communications
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On 16 Dec 2005 12:20:15 -0800, ront2 <> wrote:
> Can one lock in a rate for a 30yr fixed?
> Say it is currently 7.00%; to lock it to 6.00%
> would it take $1000 (like a point); or more like
> $2000?,$5000, or what amount? Is that how it
> works? Thanks, Ron ()
I don't know if you can lock a rate lower than current rate. Although,
you can pay points to get a lower rate. But not sure how much an
advantage that is vs. paying more down payment. I think overall cost is
the same unless you also pay down principal when you can (in which case
not paying points may come out ahead).
My refinance last spring to shave off 1% and 7 yrs of payments ($62k in
interest) only cost me $170 closing costs and about $30/mo (refinanced 3
yrs into a 30 yr to 20 yrs). But it was same mortgage company, so they
had appraisal and other original docs.