John is really looking forward to buying a home. However, interest rates have spiked and home affordability is at an all time low.
The first lender and real estate agent John worked with told him to use an adjustable rate mortgage.However, John didn't like the features of it and didn't feel comfortable using one.
Instead, John asked how he could buy the interest rate down using mortgage points.His lender told him we could pay one point and drop his interest rate from 6.25% to 5.5%
John used FitBUX's mortgage point calculator and determined paying points would save him over $200 a month on his monthly payment and his break-even was 2.25 years.
John was able to close on the house. He'll now keep an eye out on interest rates to see if he can refinance to a lower rate down the road.