Want A Lower Mortgage Rate On Your New Home?-Buy It!
Most often referred to as just-plain "points", discount points are an up-front fee charged by a mortgage lender in exchange for a lower mortgage rate.
If you have been paying attention to the Saturday Salt Lake Real Estate section in the Salt Lake Tribune you'll see some New Home Builders offering interest rates @ 4.5%. As much as 1.5 points under what the going rate is.
This article explains how this happens and what the new construction builder is doing to help make buying a new home a wise decission.
Ivory Homes offers that rate,4.5% on all of it's Utah properties. Whether your looking at buying a single family home, a Town Home, or a Condominium from Ivory, and whether the New Home is in West Jordan, Herriman or Daybreak in South Jordan, they will pay discount fees up front to offer you a more favorable interest rate.
At Mill Creek Terrace you can buy a Condominium starting at $199,900 and get a fixed 30 year rate @ 4.50 w/ the first year bought down to 3.5%.
Other New Home Builders that may offer buy downs In Salt Lake City can be found @ SLC New Construction.
The dollar value of one point is one percent on the loan size. Discount points appear on Good Faith Estimates and HUD-1 Settlement Statements on Line 802.
Historically, each 1 point paid by a borrower lowers an offered interest rate by a quarter-percent. Since the late-2008, however, this relationship is skewed.
Depending on market conditions, 1 point paid by a borrower can lower a mortgage rate by up to 0.875 percent.
As an example of how points work, a $200,000 home loan may be offered at 5.500 percent with 0 points. With 1 discount point paid at closing -- $2,000 -- the mortgage rate may lower to 5.125 percent.
In addition to lowering your interest rate, discount points may be tax-deductible, too. Therefore, be sure to provide your home settlement statements from the previous calendar year to your accountant during Tax Season.
Make sure your Realtor understands Interest rate buy-downs, as it can be a negotiated part of your offer when buying a new home.
If you want to be sure and have that kind of Realtor on your side as you search for new construction, stop by our website and check us out @ Salt Lake Real Estate.
If you want someone professional to discuss your Real Estate needs and tips about buying or selling a Salt Lake Home, give us a call @ 801-567-0946.
We can show you how to get a lower interest rate on your New Home in Salt Lake City.