Buying down the rate, how does it work?

Thanks for the question. They are charging basically 1% of the loan amount to "buy" your rate down 0.125%? If that is the case, I wouldn't buy it down. I would sure like to take 5-10 minutes to run your scenario through our system. We have some amazingly low 5 yr ARM pricing. I'd also like to explain how 5 yr ARM's adjust, if you do not already know. With 30 yr fixed rates being SO low, 99% of my clients are doing 30 yr fixes unless they have a real obvious reason not to! After 5 yrs, you can expect your 4.5% rate to GO UP! If you liked my suggestions and/or pricing when we talk, it only takes me 1-2 business days to confirm your approval. Respectfully, Brock R. Hicks, C.M.P.S. Financial Planner / Loan Specialist Toll Free: 1-877-RATE-1ST Office: 949-243-7989 ext 102 Direct: 949-287-4058 Fax: 949-612-1565Website: www.Rate1st.com Email: brock.hicks@rate1st.com

Usually 1% will better your rate by .25 to .375%. The break even for this typically 3-7 years. ARM's can be more expensive to buy down depending on the market. If you think he is pulling fast one, get 2nd quote for the buy down and compare.Ryan IngramInterstate Mortgagewww.995mortgage.com