Spam prevention
Rainer
175,485
Bob Betel
Allstar Home Mortgage, Inc. - Sweetwater, TN
President, Allstar Home Mortgage, Inc

Take the cost of the points, divide it by what you save per month on the mortgage payment, to arrive at the number of months to break even. Then, decide if you are planing to stay longer or shorter  in your home than that. 

Then ask yourself, would you rather have the money that you pay in points, or rather have the monthly savings?

Jul 01, 2016 12:16 AM
Rainmaker
2,937,566
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

I don't... it's up to the borrower and the lender to determine when/if/how it makes sense.

Jul 01, 2016 11:34 AM
Ambassador
2,341,239
Fred Griffin presently on Leave of Absence
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 ##   I will leave the discussion about points, basis points, yield, percentages, etc. to the Lender.

Jul 01, 2016 10:05 AM
Rainer
218,991
Caroline Gerardo
CMG Financial - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

In general it is better not to pay additional points to buy down a rate, unless you have to to qualify. A .5% in fee does not equal .125% in even rate increments. Paying points for a loan means you intend never to refinance and plan to keep the property longer than 7 years

Jul 01, 2016 07:11 AM
Rainmaker
1,512,398
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West & Geneva Financial, Llc. - Carlsbad, CA
Presence, Persistence & Perseverance

Senor Bob Betel answered your question for you.

Jul 01, 2016 03:48 AM
Rainmaker
996,053
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

I leave that to the buyer & lender.

Jul 01, 2016 12:06 AM
Rainmaker
633,704
Kathleen Luiten
Resort and Second-Home Specialist - Princeville, HI
Kauai Luxury Ocean Home Sales

I don't, unless I'm the one getting th eloan. then I use th emethond Bob Betel describes.

Jul 01, 2016 07:46 PM
Rainmaker
1,471,745
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

I do not. It is up to a buyer to discuss all loan products with a lender. 

Jul 01, 2016 04:42 PM
Rainmaker
1,523,292
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

I leave that up to the buyer and the loan officer to decide.

Jul 01, 2016 09:57 AM
Rainmaker
4,831,783
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

if it's a long term investment, pay points...if it's short term, don't....

Jul 01, 2016 06:15 AM
Rainmaker
797,059
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Minnette - I think Bob Betel did a great job explaining how to determine whether loan origination points are worth it or not.

Jul 01, 2016 05:53 AM
Rainmaker
4,796,409
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

This is a question I let the finance people answer.

Jul 01, 2016 04:51 AM
Rainmaker
2,854,868
Richard Weeks
Dallas, TX
REALTOR®, Broker

Nothing I could add to Bob Betel's answer.

Jul 01, 2016 04:47 AM
Ambassador
879,765
John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

Short, easy answer?  Long term, points are a good thing.  Short term (for those that sell/refi/etc within just a couple years) points don't make sense.

 

Different circumstances for everyone, but that's the gist.  

Jul 01, 2016 04:43 AM
Rainmaker
1,204,273
Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I don't.  That's for a lender to explain and the buyer to decide.  Personally, I don't do points.

Jul 01, 2016 03:00 AM
Ambassador
1,597,028
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Haven't had a client in many years buy down but my old rule of them is if you don't save more in three years than the money put into the buydown, it isn't worth it. 

Jul 01, 2016 02:53 AM
Rainmaker
1,364,217
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Minnette Olsen Loan origination points are charged by the lender for processing, evaluating and approving a mortgage. These fees are determined by the lender and are negotiable between the buyer and the lender.

On the other hand, mortgage or discount points is in essence pre-paid interest to buy down the interest rate on a loan. The buyer should do an analysis to determine if it is a cost benefit for a lower monthly payment up front.

Jul 01, 2016 02:33 AM
Rainmaker
3,213,850
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

That's a good question for a buyer to ask their mortgage professional and for the mortgage professional to listen to the buyer.  

Jul 01, 2016 01:15 AM
Ambassador
1,613,368
Harry F. D'Elia
Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

That is determined by the buyer and loan officer.

Jul 01, 2016 12:41 AM
Rainmaker
1,265,001
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

In discussion with the lender, the buyer weighs the pros and cons.  It depends on the type of loan they need and how long they anticipate being in the home or how quickly they plan to pay off the mortgage.   It is not something the agent is involved in at all.

Jul 01, 2016 12:11 AM
Ambassador
3,897,745
Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

That's a discussion between the buyer and lender around the financial pros or cons. And the best interest rate might necessiate paying them.

Jul 01, 2016 12:10 AM
Ambassador
2,844,556
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

It's more a matter of are they competitive with other lenders.  You can't borrow money without paying an origination fee.  

If you mean buying down the rate, that depends upon how long you plan to stay in the home.  They longer you stay the more important a lower rate is to you.

Jul 02, 2016 02:04 PM
Rainmaker
795,403
Diana Zaccaro
Tropical Beachside brokered by eXp - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

I don't...questions like this are referred to the lender since that is their field of expertise. Bob Betel gave a great answer.

 

Jul 02, 2016 01:50 PM
Rainmaker
3,038,316
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Bob Betel expained this pretty good.

Jul 02, 2016 12:44 AM
Rainmaker
5,220,800
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

I like the answer by Bob Betel

Jul 01, 2016 11:18 PM
Rainmaker
3,048,869
Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

I personally don't - that's between the Buyer and their Lender...

Jul 01, 2016 11:04 PM
Rainmaker
2,925,953
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Basically how long a buyer will stay in the home. Points are profit for the loan officer so in most cases under 7 years no points.

Jul 01, 2016 10:55 PM
Rainmaker
3,132,250
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Once upon a time! Today, not so much!

Jul 01, 2016 10:38 PM
Rainmaker
4,431,606
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

The loan officer can explain it to you.

Jul 01, 2016 09:02 PM
Rainmaker
1,157,254
FN LN
Toronto, ON

No need to do so in our great land since points are not used here.

Jul 01, 2016 05:21 PM
Ambassador
4,297,836
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Minnette Olsen - simple math. If it brings down the rate enough to repay in number of years the owner will stay in home, go for it!

Jul 01, 2016 04:07 PM
Ambassador
3,671,820
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Look at how long it takes to pay off the extra points, and consider how long you'plan to own the house.

Jul 01, 2016 01:08 PM
Ambassador
3,981,808
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Do the math and figure out when you will cross over the break even. It is usully never a good idea if the property is going to be held short term.

Jul 01, 2016 12:58 PM
Rainmaker
2,394,627
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

I don't, the lender does.

Jul 01, 2016 12:40 PM
Rainmaker
3,751,590
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

I want the lender to discuss this with the buyer..he is the professional I don't pretend to do his job!

Jul 01, 2016 12:28 PM
Rainmaker
2,414,060
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Subjective. If it gets you from point a to point b and that is the journey, ante up. What else is money for I ask you?

Jul 01, 2016 07:18 AM
Rainmaker
976,198
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

only if one will hold on to that loan for years. Need to determine breakeven point(yrs).  Chances in 6 months new borrowers most are refin.

Jul 01, 2016 12:54 AM