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Message
Mortgage rate credit vs lower rate
Posted on 8/25/25 at 4:50 pm
Posted on 8/25/25 at 4:50 pm
OK, I'm looking at a 5.5% rate with a $500 credit on a $600K+ finance; however, I can take a higher rate (5.75%) with a $5k credit and hope that rates drop within the next 50 months (the quarter percent means about a 100 dollar difference in payment).
What makes sense?
Can we expect rates to drop next month and I just refi in months?
What makes sense?
Can we expect rates to drop next month and I just refi in months?
This post was edited on 8/25/25 at 10:54 pm
7
Posted on 8/25/25 at 6:55 pm to cubsfan5150
quote:
Can we expect rates to drop next month and I just refi in months?
At least in the next 12mnths so i would take the credit
Posted on 8/26/25 at 7:42 am to cubsfan5150
Are you factoring in how much it will be to refi again?
Typically not "Free"
Typically not "Free"
Posted on 8/26/25 at 8:07 am to thunderbird1100
There are a couple of variables that I didn’t think of initially.
One was what you mentioned. A refi can cost what the credit I’m receiving is or more.
Two, the zero point refi rate seems to be an eighth higher than the purchase rate, on average, and I would need at least a half a point gap in order to refinance.
One was what you mentioned. A refi can cost what the credit I’m receiving is or more.
Two, the zero point refi rate seems to be an eighth higher than the purchase rate, on average, and I would need at least a half a point gap in order to refinance.
Posted on 8/26/25 at 8:27 am to cubsfan5150
Take the lower rate and don't look back. One less thing to stress about and a refinance likely at least $5k.
Posted on 8/26/25 at 7:30 pm to cubsfan5150
ARM or Fixed?
Posted on 8/26/25 at 9:00 pm to cubsfan5150
quote:
Can we expect rates to drop next month and I just refi in months?
Good luck…
The majority of mortgage rate declines have happened before the Fed cuts overnight rates.
This past fall you wanted to lock in rates immediately before the rate cut. Waiting even a week cost you money. Our current federal debt situation makes all of this a bit of a crap shoot anyway. Despite what SDV says, there alot of structural reasons to think mortgage rates have relatively limited downside from here.
You might get your .5% or so drop necessary to justify a refi though. Hell that’s always in the cards.
Posted on 8/26/25 at 10:12 pm to npt817
Fixed and I decided not to take the credit. After all considerations, it ain’t worth it.
Posted on 8/26/25 at 10:14 pm to slackster
quote:
Despite what SDV says
You’d have to be hard pressed to take advice from him.
Posted on 8/26/25 at 10:45 pm to cubsfan5150
Who is the lender?
Are those below market rates?
Are those below market rates?
Posted on 8/26/25 at 11:38 pm to ItzMe1972
Omaha Mutual
No, just the lowest in the market
No, just the lowest in the market
Posted on 9/22/25 at 6:57 am to cubsfan5150
The $5k credit looks good on paper but unless you’re certain rates drop enough to cover all the refi costs, it’s basically a gamble. When I was shopping, JumboLoan.com gave me a good view of the spread between conventional and jumbo rates. Seeing that, I leaned toward the lower rate because the upside wasn’t big enough for me to risk it.
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