Why is a NO COST purchase loan a better deal for you? Will you save money by paying fees and/or points in exchange for obtaining a lower interest rate? Or do you come out ahead on our NO fees and NO points program while receiving a slightly higher interest rate?
To answer those questions take a look at the following hypothetical situation:
*($300,000 + $5,000 in fees and/or points)
The difference in monthly payments is $66.50 per month. Essentially, you just spent $5,000 to save less than $66.50 per month. How long will it take for you to break even and start realizing your savings? Are you ready for this? 75 MONTHS!!
That’s right--It will take over 6 YEARS to “pay off” the $5,000 you spent and start to realize your monthly savings. During this time, if rates drop and you want to refinance again, you’ll be stuck paying more fees and more points until refinancing simply will not be worth your money.