Should I buy down the rate?
We just got pre approved for a loan and got a $200k loan that was upgraded to $250k after paying off income tax. I asked for the rate we would be getting and the lender quoted 4.375% with the option of buying it down to 4.125% for $800. Aren’t these rates pretty high? Lender said that it was due to a high DTI because of student loans. Should I buy down the rate? by barnett734 from El Segundo, California. May 18th 2022
John Burke (jburke)
#27 ranked lender in Texas - 321 contributions
What type of loan, FHA, VA or conventional? Your debt to income ratio doesn't really factor into the rate. Given the info you provided, it does make sense to buy down your rate. Here's why. You would save $36.59 each month with the lower rate and it will only take you 21.86 months to recoup the $800 buy down cost. It may not hurt to get a 2nd opinion. | John Burke | Senior Mortgage Banker | Lending in ALL 50 states |Stride Bank | jburke@stridebank.com | (877)228-9069 | NMLS# 787231 |
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