Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase. 

This morning I sat down with Justin Froiland from Fairway Mortgage. Listen as Justin explains how you can buy down your interest rate prior to closing on your new home.  You can reach Justin at 605.695.1429 or justin.froiland@fairwaymc.com.  His office is located at 412 5th St., Brookings SD 57006 or on the web at www.BrookingsMortgage.com 

Buying Down your Interest Rate

- What's up everybody? Shane here from the Brookings Home Team, powered by Century 21. We are ready to do another Monday Morning Mortgage Tip. And again, this is pre-recorded. We are not live but, cross our fingers hopefully, shortly we'll be back to somewhat normal, is what people call it. But, Justin is back in today for our Monday Morning Mortgage Tip, Justin, again is from Fairway Mortgage. So, if you have questions for him, or anything there feel free to reach out to him. His information will be on the top, on the bottom or on the sides wherever your device allows you to see that. So with that being said Justin, what is the word today?

- Yeah, thanks for having me today, Shane. Today I wanted to spend a little bit of time talking about what's called paying for points on your mortgage or buying down your interest rate it can be referred to as well. It's kind of been a hot topic lately especially with where rates are at in great shape. Already, it's made it even more lucrative to spend a little bit of extra money upfront at closing to be able to get a little bit lower interest rate. And so essentially what the gist of paying for points on your mortgages without getting in all the nuts and bolts of it, essentially what happens is you can elect to increase your closing costs, and your out of pocket expense at closing, by a relatively small amount in order to secure a lower interest rate for the course of the loan. And so just one random example, and I should put the disclosure out there that this is not where the rates are at right now, this is just a hypothetical scenario, And so like, let's say, for example, if you had a, you're buying a house and before you did any sort of buydown or paying for points, if your rate was at, let's say, 3.375%, what could potentially happen is you could, you know, maybe spend an extra thousand dollars at closing to get that lowered down to, you know, maybe a 3.125 or maybe the 3% flat. And so, so that's kind of how that works without getting into the nuts and bolts of it, definitely would suggest that you talk with your lender about it if you're in the process of either refinancing or purchasing a new home. There's a number of factors that go into whether or not it's a good idea for you. One of the big ones is how long are you planning on being in the specific house? Because, with that added up for a cost, there's of course breakeven points that need to be calculated, and some different factors along those lines. And so, so yeah, that's just the gist of what I wanted to talk about today, as far as paying for points on your mortgage and whether or not it's a good idea for you to look into or not.

- No, that's good information. Like you said, the rates are low and it's, you know, he can't keep using the word or the phrase, free money, but, it's getting pretty closer to free money

- Yeah.

- and if you can buy some more free money, why not do it? So,

- Yeah, definitely.

- Yeah. And we did have something on this, I think a while back ago, but it's always good to refresh and probably the rates weren't near as good as what they were at that time either, so,

- I doubt it .

- Great information, and, yeah, you could really get into a nice home with 2%, two and a half percent you know, wherever you think you could buy down to. So, got any questions again for Justin, let him know, reach out to him, reach out to me and I'll put you in touch too if you need it, You have any other questions related to mortgage that you'd like answered, let us know as well and we'd be happy to answer that on our next episode. And as always feel free to share or tag this video with anybody else you think would be interested and, feel free to let everybody know. But Justin, thanks again.

- Yeah thanks Shane. Appreciate it and, get outside, enjoy this nice weather. And, we'll just keep moving on moving on. So,

- Sounds like a plan.

- Alright. Thanks again for everybody for watching. Have a great day. And we will see you next week. But till then, see you later.

- Thanks guys.

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