Shown below are rate options for a 30 year fixed rate, 45 day lock, primary residence purchase with a 740 FICO.  Our initial approach is to look for the lowest rate that doesn’t cost you any points – and you can see below that the “no points” rate, is 7.125% on this rate sheet.  Sometimes we refer to this “no-points” rate as the “par” rate.  For rates above 7.125% on this rate sheet, you receive a lender credit that reduces your closing costs.

We are generally not fans of paying much in the way of points.  Today,  October 10, 2020 – rates are at the highest they have been since 2001, but still below the historic average of 8%.  Rates have increased for many reasons, including inflation, recession fears, the war in Ukraine, and more.  The good news is that rates are cyclical, and we do think rates will come down – at some point in the future.

We will help you make a decision about whether you should pay points or not – the option is always yours to do as you prefer.

From the options below, you can see that you would pay .250 points for a rate of 6.875% – which is .250% below the no-points rate of 7.125%.  And so it would take 1 year to recoup the points.  You would pay 1 point, or $4400, for a rate of 6.625%, which is .500 points below the 7.125% no-points rate.  And so it would take 2 years to recoup the points you paid.  Once you have recouped the points, you are at the breakeven point, and begin at that point to benefit from the lower rate.

APRLoan AmountPrincipal & Interest PaymentPoints You Pay For This RateYour Cost In Dollars  For This Rate

Rate locks are available in lock periods of 7, 15, 30, 45, 60 and 75 days.  You will pay more points for a longer rate lock, so when it is time to lock your rate, we will lock for a  period of time that encompasses your closing date.

Frequently Asked Questions

When will rates go back down?