Showerthought: my neighbor the refinance broker told me to just take the higher closing costs for a lower rate

He swore paying 1.5 points upfront would save me $8,000 over 5 years on my home loan in Phoenix. Fast forward 2 years and I sold the house early, now that extra cash is gone and I barely broke even on the rate difference. Which side do you lean on, lower rate with points or no points with higher rate?

2 comments

2 Comments

xena_hernandez9814d ago

Your neighbor the refinance broker was basically selling you a crystal ball and you bought it. Real estate math changes faster than Arizona weather. I had a guy try to sell me on points for a house I was planning to flip in 6 months. Told him I'd rather just take the higher rate and use the cash for a good toaster. Still have the toaster.

faith2714d ago

lol @xena_hernandez98 the toaster thing is hilarious but honestly you're not wrong. I stopped trying to time the market and just locked in a rate that let me sleep at night, worked out way better than chasing points.