Get to the Point
Don’t be scared by higher mortgage rates. The IRS will help you!
Heard across America: “Oh my freaking god. Rates went into the 4’s instead of the 3’s. The world is over. I can’t buy, I am stuck!!!!”
No, you’re not.
People ask me, What’s the rate on a 30 year fixed? The problem is, there is no direct answer. It is not 1968 and your parents got to the banker down the street in his three piece suit who determines if you can buy a home. Back then, yes, there was one rate. Period. Not today.
In order to get a rate, I need credit score, loan to value, type of home, etc. etc.
Then, I get results.
Notice something? There are rates from 3.75% to 4.875% for a 30 year fixed. The only difference is that the lower the rate, the more upfront fees (points) you pay to get them.
Under this scenario 4.25% and you get 1/2 a point back to use towards closing costs or you can pay .25% and get 4.125%.
But, if you wanted the lowest rate (3.75), someone would need to pay 2.375%. On a purchase, that someone does not need to be you. It can be the seller. Whoever is negotiating your purchase can ask a seller to pay closing costs in a transaction. There are specific limits based on the amount of down payment, but the minimum is 3% of the sale price!
Now, for the beauty of this. Point are still tax deductible in the year you purchase the property on your federal income tax but the real beauty is if the seller pays the point, you get to deduct them. Let me repeat:
If the seller pays the point, you get to deduct them!!
It is a free tax deduction that you do not pay for AND you get the lower rate for the entire loan. The savings is silly.
Call your accountant today to make sure this will work in your bracket.
And to sign up for daily mortgage interest rates for your scenario, please go to http://usloans.com/rates