[quote=HLS]OP,
Former.. OP was referring to the $10K tax credit, it’s not an option to lower the loan amount.
FWIW
It usually doesn’t make sense to lower the loan amount, you are still paying a higher rate on the entire balance. In your example, you would never pay $10K on a $192K loan to only lower rate by half a point. That’s over 5pts of the loan amount.
Make sense ?[/quote]
I agree they cannot lower the loan amount directly by the tax credit funds. I was simply looking at ways to equate things from an economic perspective (a thought experiment).
From both angles, clearly he is better off attempting to get the tax credit. (As you point out that 10K is way too much to lower by only half a point)
In any event, the value of the 10k tax credit is significantly more valuable than any expected increase in interest rates on a 192k loan over such a short period of time.
