Getting Personal
Points?
Okay, I've learned the hard way that I can't stay in a hotel without a good Internet connection just to save a few bucks, It isn't worth the time and aggravation. Anyway, since I couldn't post yesterday, here's an extra one for today.
Question: How do I see whether it's a better deal for us to refinance, say, at 5.8% with closing costs of, say $5,000 or to go with an offer with no closing costs but at 6.5%? It has to do with time to recoup the closing cost expense and time we plan to be in the home...? Are there amortization schedules (is that what you call them?) that can be run to show me the comparisons? Thanks much for any help! Johan, Ocoee, FL
Answer: Yes, there are a number of calculators on the web. For instance, you can go to www.dinkytown.net. In its mortgage calculation section there is a "mortgage points calculator." This way you can weigh the trade-offs. In general, the big advantage of a no-points mortgage is that it's cheaper if you end up refinancing at a lower rate within a reasonable period of time (or end up moving within a few years). The advantage of paying a point or two is that you buy down the interest rate, which can pay off over the long run. The mortgage calculators will give you concrete numbers to work with.
Search
Looking for guidance on your personal finances? I'm taking your questions and answering one here each day. Just click on the "Ask a question" link to tell me what's on your mind.
Chris Farrell Marketplace Money personal finance guru
Categories
- Banking
- Books
- Budgeting
- Charitable giving
- Credit cards
- Credit counseling
- Credit report, credit score
- Debt
- Dollar exchange rate
- Economy
- Estate planning
- Financial planner
- Housing
- Insurance
- Investing
- Kids and money
- Mutual funds
- Other
- Paying for college
- Retirement
- Retirement savings
- 401k
- Bonds
- IRAs
- Money markets
- Mutual funds
- Savings
- Scams
- Social Security
- Taxes
- Vacation
- Work
- cars
- graduate school
Hot Topic
Latest Posts
Archives
| S | M | T | W | T | F | S |
|---|---|---|---|---|---|---|
| 1 | ||||||
| 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| 9 | 10 | 11 | 12 | 13 | 14 | 15 |
| 16 | 17 | 18 | 19 | 20 | 21 | 22 |
| 23 | 24 | 25 | 26 | 27 | 28 | 29 |
| 30 | 31 |
sponsor
Latest Comments
- Tax-exempt bonds vs. taxable bonds (1)
- Eric Vanhove wrote: So, if there are calculators on the net, why should we be reading your blog? Geez, give us the form... [read]
- Buying a few shares (2)
- Manuel Mihalas wrote: I would recommend you minimize your trading cost as much as possible. There are many low cost tradin... [read]
- Bob wrote: I just enrolled my 17-year-old in a no-load Roth IRA that requires no minimum contribution. There a... [read]
- CDs (2)
- Mark wrote: According to this, you can withdraw all of your money penalty free after 6 days, and still get the i... [read]
- mei wrote: Can’t state enough how important the sacrifices that go into wealth creation are. Curious if anyone... [read]
- Home equity line of credit (3)
- Bruce wrote: I disagree about using a credit card unless you plan to pay it off quickly. Especially with credit ... [read]
- DJ wrote: Using a cc is not most sensible option. My financial "guru" would never recommend using a cc that yo... [read]
- Variable annuity (1)
- ann hancox wrote: I took Chris's advice and also agree, they are expensive and once fit my life style. I recently cas... [read]
sponsor
