Whats the cost of points on a $200,000. mortgage? I'm i correct?, If my offered interest rate is 10. 00 % and

Question

i offered to buy down, 3points.= 3,000. Does this mean I'll get at 7.00% interest rate with a fair credit score 640.

Answer 1

This is just wrong; this isn't even a jumbo loan. You should be able to go FHA and get a prime rate around 7 without paying points. I suggest Hometown Banc Corp. My mom used them. They may be your best opportunity for someone to say yes. If your credit does not measure up, they don’t simply “forget to call you back.” They help you get into a credit repair program you can afford regardless of income. Check out the free evaluation form at www.totaldebtsolutionsllc.com and a Hometown loan officer will contact you .

Answer 2

the rule of thumb is 1/8% for each point. So in your case, your rate would have been 10% with 0points or 9 1/8 with 3 points.

I usually don't recommend points. You are paying $6,000 CASH to save about $65 a month. No a great deal.

In addition, with your credit score of 640, you should be able to refin in 1 or 2 years at a MUCH better rate.

I would NOT do the points. SAVE the $6,000.

I'm also guessing that there is a prepayment fee on this. DO NOT DO THIS. Even if you have to pay 10.5%.

Answer 3

1 point = 1 percentage point. 1% of 200,000 is 2,000. 3 points will cost you $6,000. Each point usually buys down 1/8% of interest over the duration of the loan meaning your new interest rate is 9 5/8%

This is a SUPER CRAPPY loan. DON'T DO IT. IF YOU STILL DO IT YOU WILL JOIN THE FORECLOSURE PARTY SOON.

good luck!

Answer 4

All you are doing by buying points is paying the interest up front. Your not saving anything.

Answer 5

You're willing to accept a ten percent interest rate, even if you can 'buy it down' to seven percent with points up front ?

Welcome to the world of subprime foreclosures. Don't take this silly loan.

Answer 6

Not necessarily. You can buy it down, but just because it is 3 points does not mean it goes down to 7%.