How much can you buy down your interest rate on a mortgage?

Question

How far down can you buy your interest rate?

Answer 1

If you are really serious you can get down to around 1%. This is not offered as standard and you will have to work with the lender to get there, but do you really want to? It might sound like a good deal at first, but as you lower your interest rate your APR will actually go higher. Every loan package will have a break even point where going any further is actually throwing money away. Without knowing full details of your finincial situation I cannot actually say that it is a bad idea, every loan is different, but normally going more than 1/2 to 3/4 buy down is about the best you can do and stay on the profitable side.pp

Answer 2

Usually theres a 2-4 point buy down max but it it may not make much sense if you have a short term fixed rate loan. If you are getting into a 30yr fixed then a large buy down might make more sense but in most cases using the money as a down payment should be the way to go.

Answer 3

You can pay as many "points" as you want to in order to bring down your interest rate. The thing is, however, that at some point it's not cost effective. You'd be better off putting that money toward the down payment so you don't have to take out such a large loan. It's just a numbers game.

Answer 4

you're bearing on paying "decrease value factors." tell your loan broker provider you like a particular value and he could additionally help be attentive to if a) this is obtainable and b) how lots it is going to cost you. you could assume to pay approximately 3/8% for each a million/8th you drop in value. i prefer to propose buying down your value below here situations: a million. somebody else is paying your ultimate expenditures and there is funds obtainable. 2. you intend on being in this domicile for a substantial quantity of time, not in easy terms some years. 3. you have extra desirable funds interior the economic corporation and you have not to any extent further advantageous determination to making an investment it someplace else. desire this helps. better of success.

Answer 5

All depends on the day, the lender, what the market is doing. Eventually, you hit a floor. And usually it stops being worthwhile before you hit that point.