Updated over 8 years ago on . Most recent reply
Points or no points scenario
Good day BP
Curious as to your opinion on the concept of buying points and whether it makes sense.
3 family property Mortgage 600k will be House hacking. I can buy points to reduce interest rate. A .25 reduction equals 1% of the purchase price ($6,000). The 2 Rental units will generate approximately $2,900. Bank will give interest rate of 3.75%. Do you suggest buying points down to .75%. It is my intention to keep the property for the life of the loan. .75% interest rate may allow me to walk away every month paying nothIng out of my pocket and walking away with at least $100 profit. If i don't buy points I come out of my pocket a few hundred dollars a month. Maybe about $800
Mathematically I know it makes sense just wondering if tying up almost 75k for the sake of purchasing points is being a little too ambitious.