Real Estate Blog

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 Mark Waterman from Great Western Bank. Mark talked about "Buying" down your interest rate and if that would make sense for you.  There will be more questions on this, so please reach out to Mark for all your answers!  You can reach him at 605.627.0602 or Mark.Waterman@GreatWesternBank.com  His office is located at 1302 6th St., Brookings SD 57006 or on the web at www.GreatWesternBank.com.

BUY DOWN YOUR INTEREST RATE-IS THAT RIGHT FOR YOU?

- Hey, good morning, everybody. It's Monday we're just finishing digging out from our blizzard of 2018, middle of April. Shane Andersen here with the Brookings Home Team powered by Century 21, and I've got Mark Waterman here from Great Western. We got a really good topic to talk about today we've had some questions about this, and thought it'd be a good time to bring it up. So, what do you got today for us, Mark?

- Alright, thanks, Shane, for having me. So what I wanted to talk about today is buying down the rate, or buying points. So, what that means is is at some point during your the home buying process, you're gonna have a discussion with your lender about locking in your rate, okay? And once that happens, generally, you're gonna have a couple of options. You're gonna have a rate that's closer to par, they call it, where there's probably gonna be no points that you're gonna have to pay to get that rate. Or you could have an option of paying a point, or half a point, or point and a half, and buying down for a lower rate to have over the course of that 30 years. So, one of the reasons somebody might do that is if you know you're gonna be in that home for a long period of time, it could be a good thing to buy the rate down so that you enjoy that lower rate over the course of your 20 or 30 year loan, okay? Real-life example, I had somebody just a couple weeks ago that was able to, the rate was four and a half they were quoted. They were able to buy a point and get four and a quarter. So their loan was $200,000, they were able to pay $2,000 up front towards their closing cost, and in return they got 4.25 instead of four and a half. So, the reason they did that, essentially they were saving $30 a month, and so they could, rough numbers, divide that 2,000 by the $30 that they were saving every month, it was about five and a half years. So, they made the decision, they were gonna be in that house for more than five and a half years, and it made sense for them to get that lower rate. Everybody, you know, everybody's situation is different and it's certainly something that the buyer has to decide. As lenders we can educate you, you know, what exactly it means and what that might do to your loan and your payment amount, but ultimately it has to be the borrowers decision, but it is something that I've seen lately. I've done a couple of them. You know, I think as rates probably continue to go up, I'm only gonna see it more. Just because, you know, people do enjoy the lower rate for the most part. So I think it's gonna be a little bit more prevalent.

- Okay, there are some variables that play a part in that, as Mark said here, and it might not work for you, but the best thing is to do, come in and talk with Mark, find out what is your best option and what's gonna work best for you there, too. So, great tip. And, like you said, with the rates kinda going up, we don't anticipate them going up too much this year, but they have gone up a little bit. And like you said, this could be a good topic, or a good question, that you're gonna be hearing about a lot here. So, good information. If you have any questions for Mark, please reach out to him. He and I'll have all his information on the top, on the bottom, on the sides, wherever your device will allow you to do that. Feel free to reach out to him that way, or, again, you can also contact him instant message, or whatever's easiest for you--

- Yep.

- There, too, so. There you have it, don't forget National Open House Weekend this weekend, everyone. We'll have the list of all the open houses that will be taking place right here in Broookings and the surrounding area. If you would like your own personal list, shoot me a message and I'll be happy to e-mail that information to you. Lots of great open houses and lots of great homes to view this weekend, and thanks to Great Western, we got a little price package that will be available to you if you come in to our open houses. You wanna show it to them?

- There it is.

- There it is. So feel free to come on in, make sure you register while you're there, you could win one of those awesome prizes from Great Western. So, thanks again for watching, everybody. 'Till next week, we'll see you later.

- Thank you.

Thinking of selling and/or moving to Brookings, Volga, or any surrounding areas? Got questions? I’m here to help! Visit BrookingsHomeTeam.com for more details!