Should I sell mortgage points right now?

Question

Based on my understanding, purchasing points typically necessitates holding the mortgage for 5-6 years to reach the break-even point. Given the current scenario, there's a high probability that mortgage rates may decrease within the initial 2 years. Would it be advisable to sell the points, receive closing credits, and subsequently refinance when the rates drop?

Caroline Gerardo · Answer

Problem is:

Lenders are not offering non owner occupied loans with no points today due to losses. You can't actually "sell the points" you pay for them as rate concessions. There are no loan programs with negative points to use as concessions

Joseph Coleman · Answer

@Ryan Sun A loan officer is going to be the best person to advise on the mechanics of how to accomplish your goal. When lenders sell and purchase loans on the open markets they do (in theory) have options to get you a higher interest rate loan with lender credits. I have never heard of selling points. Also, on a side note "points" just means percentage points. It may or may not be for a rate "buy down" What you are referring to are lender credits. Read about them here. But to answer your question, "Would it be advisable to sell the points, receive closing credits, and subsequently refinance when the rates drop?"This is essentially another way of asking if you should you place a bet that rates will decrease. I would take your money to Vegas for better odds.

Dave Skow · Answer

@Ryan Sun- thanks ...as  most people believe rates  will decrease  withing the next few years - I would recommend  trying to minimze the  points  ( aka loan fee)  that you pay ....fyi - if you are  talking about a  rental  property  loan - most of these  come with high loan fees  right now to begin with .  If you have a seller willing to provide a large  credit or price  decrease  - I would use the  credt to cover the loan fee/ points / prepaid items - good luck

Andrew Postell · Answer

@Ryan Sun I would encourage you to only "Buy" points that have a 2 year breakeven point currently.  I would also not advise taking the "higher" unless selling the points also has a 2 year or less payback.

Should I sell mortgage points right now?

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