Refinance rates have declined steadily to near sixty-years lows; however, since 2007 the number of discount points homeowners have paid have doubled according to Freddie Mac. While paying discount points will lower rate, points make it more difficult, even impossible to break even recouping your out-of-pocket expenses. If you don’t break even recouping closing costs you’re losing money no matter how great your new interest rate.
Here’s an article by Dan Green of the Daily Mortgage Reports.com with what you need to know about paying unnecessary discount points when mortgage refinancing:
Mortgage rates have been on a multi-year downward trajectory. Conforming mortgage rates, FHA mortgage rates, jumbo mortgage rates — everything has dropped As recently as 2006, 30-year fixed rate mortgage rates in the 6-percent range were common. Today, the best rates 30-year fixed rate mortgage rates are closer to 4. However, as mortgage rates have dropped, mortgage costs have climbed. It’s the start of a trend that should carry forward for the next few years.
If you want the most benefit from refinancing with today’s best mortgage lenders like USAA mortgage rates, you must avoid paying unnecessary fees. Breaking even recouping your out-of-pocket expenses is the quickest way to benefit from lower your payment amount. In addition to unnecessary discount points there are a number of junk fees like application fees, processing fees, and courier fees you’ll want to avoid.
You can learn more about getting the best deal on your next home loan without paying unnecessary discount points or junk fees by checking out my free Underground Mortgage Videos.