Hey everyone, I’m looking for some advice on our home purchase. We’re eyeing a $370k house with a $40k down payment. The lender offered us a 30-year VA loan at 6% interest. They mentioned we could buy points to lower the rate:
- 2 points ($6,600) would drop it to 5.5%, saving us about $105 monthly
- 3 points ($9,900) would bring it down to 5.25%, saving roughly $156 per month
Both options have a break-even point of around 63 months.
I’m thinking rates won’t go down much in the next few years, so refinancing doesn’t seem likely anytime soon. Does it make sense to buy down the rate now? I feel pretty sure about this, but I’d love to hear what you all think. Anyone been in a similar situation?
Interesting dilemma! Have you considered how long you plan to stay in the house? The break-even point is crucial. Also, what about your emergency fund? Buying points might eat into that. Maybe splitting the difference and going for 1 point could be a good compromise? What do you think?
hey sereneYogi55, i’ve been there! points can be tricky.
if ur staying for 5+ years, it might be worth it though its cash upfront u might want for other stuff. maybe try 2 points? good luck with ur home!
Consider your long-term plans carefully. Buying points can be beneficial if you’re certain of staying in the home beyond the break-even point.
However, the upfront payment of $6,600 or $9,900 might restrict cash availability for unexpected expenses or improvements. If you have a stable financial situation and foresee living in the house for 7+ years, the 2-point option may represent a balanced approach. Ultimately, it’s a trade-off between the immediate cost and the prospective monthly savings—evaluate based on your personal financial outlook.