WOW! Mortgage rates are at the lowest they have been in a few years! This is the "golden opportunity" for someone to refinance their home or purchase a home. Take advantage of the low, low rates while we have them!
You can see on my website that my rates are updated every single day, and change when market conditions change as well. Click on the following link to see my rates. http://www.caloanpros.com/TODAY'SRATES. I like to give clients the option to pay points to reduce their rate or not to pay points. It really depends on the individuals situation and timeframe they will keep the loan. For example:
* Scenario based on todays rates; 12/11/08 ($350,000 loan amount)
30 yr fixed conventional loan @ 5.375% with NO points = $1,959 monthly payment
OR
30 yr fixed conventional loan @ 4.5% with 2 points = $1,773 monthly payment
FACTS: The difference in payment =$186.00 ($1,959 minus $1,773)
2 points on a $350,000 loan = $7,000 (loan amount x 2%)
You divide the money saved per month by the $ amount of points paid ($7,000 divided by $186= 37.63
This means the borrower would benefit from paying points to reduce the rate if he/she was to keep the loan for a minimum of 37 months. Of course, the 2 points paid ($7,000) would also be a tax deduction that year for the buyer. (if refinacne then the tax deduction is spread out over life of loan or until refinanced again)
Assumptions;
$350,000 loan amount
20% down payment
Owner occupied property
Single family residence
Good credit - 680+ fico
Full documentation loan
30 day rate lock
No BK or F/C in last 4 years
Taxes and insurance were not added into the payment
Regards,
Gerard Ladalardo, CMPS
www.caloanpros.com
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