[quote=cooperthedog]
True, but the opportunity cost of the few thousand also must be taken into account.
If your rate of return is higher from investing the buydown money, then you will “save” less over the life of the loan vs. investing it.
With rates at 5%, do you expect your investments to return more or less then that over the next 30 years? Another way to look at it is; would you be willing to invest in a 30 year bond at 5%, or would you be worried about future inflation or better returns from different asset classes?
I’m of the opinion that with fixed rates this low, I want to use as much of other peoples money as possible. [/quote]
Please run your numbers with your assumption. Use a $500k house w/ 20% down as the example. 5.25% w/ 3900 in fees and 6.25% w/ 0 fees. Let me know what you come up with.
carlsbadworker, what kind of opportunity cost do you think you’ll lose with $3900 over 30 years. Please run your # and prove me wrong. I’ve came up w/ the numbers in my example.
With 5.25% rate, you’d pay $395k in interest over 30 years. with 6.25% rate, you’d pay $484k in interest over 30 years.
