Grapevine, TX · Member since 2018 · 2 posts · 0 votes
So I am planning to do a cash out refinance on my house and buy additional real estate (or some other investment, could be stocks, bitcoin, multifamily syndication, etc). My question is whether I should "buy" points to lower the interest rate on the ~$400k mortgage from about 3.375% to 2.875% for $7,500 or put the $7,500 (along with the $100k from the cashout refi) into some other asset investment, let's assume an S&P500 index fund for simplicity's sake? I'm getting analysis paralysis...not sure how to compare paying up front to reduce monthly expenses with investing in something that involves appreciation/dividends.
In most cases when you look at a buy down if it presents a benefit cost wise within (36-48) months it might be worth the cost now for the long term benefits. But in all honesty you could get a better rate then that at less of the cost and instead of a large buy down just do a "rate & term" refinance down the road into a shorter term/lower rate. It will cost to refinance but not $7500.00...
In most cases when you look at a buy down if it presents a benefit cost wise within (36-48) months it might be worth the cost now for the long term benefits. But in all honesty you could get a better rate then that at less of the cost and instead of a large buy down just do a "rate & term" refinance down the road into a shorter term/lower rate. It will cost to refinance but not $7500.00...
It all depends on how long you are planing to sit on that refinanced property. If for the long term, it might be worth it, all though again, $7500 on $100k is pricy.