TOM & CYNDEE
BROWNER - CRS,
ABR, GRIQUAD CITIES REAL ESTATE WITH RE/MAX
SERVING THE ENTIRE IOWA AND ILLINOIS QUAD CITIES ............................................................
DAVENPORT - BETTENDORF - ROCK ISLAND - MOLINE AND SURROUNDING COMMUNITIES
TOM & CYNDEE
BROWNER - CRS,
ABR, GRI
BROKER OWNERS OF RE/MAX BI-STATE - SERVING IOWA & ILLINOIS
1-563-388-0008 Office - 1-563-388-0083 Fax - 1-866-388-0083 Toll Free - 1-563-570-7629 Cell - 355-1616 Home
Have a question? The answer is just a call or e-mail away. Contact us at tom&cyndee@quadcitiesrealestate.com
We are both Accredited Buyers Representatives (Certified Buyer's Agents) we know you want to make the best decision. You want the best home possible for your investment. We know the market, and we work at your pace and not ours. We will guide you through all the forms, take you through the first time buyer programs and/or financing, inspections and explain everything each step of the way. We take care of all the details and problems before they become a problem to you. Call us on our private line at 570-7629 at RE/MAX BI-STATE or Contact us at tom&cyndee@quadcitiesrealestate.com - LOOKING TO SELL? Check out the services an Certified Residential Specialist can mean to you.
DISCOUNT POINTS
What are discount points? Simply, points are prepaid interest. Let's pretend that interest rates are at 8 1/2 percent and you do not qualify for the loan on your dream house at 30 years fixed interest at the going rate. You have a fixed income with little chance for any large wage increases. As a result, you are uncomfortable going with any of the adjustable rate loan programs. Let's also pretend that you qualify for the home if you could get 8% interest.
The answer may be in either you, the seller or both paying discount points up front to lower the interest rate. One discount point is equal to 1% of the amount being borrowed, the "principle". Each discount point paid will buy down the interest rate about 1/8 of a percent in markets where interest rates are rising. In markets where interest rates are falling, the same discount point may buy you a 1/4% decrease in interest rates. So, if someone would pay 4 discount points, you could get an 8% interest mortgage and buy the home of your choice.
In recent years, it has not made a lot of sense for anyone to pay the discount points. 4% of $100,000 is $4,000. In the present market, the monthly payment decrease due to the lower interest rate will break even with the cost of the discount points in about seven years. However, if this is your dream home and you can not see ever moving within seven years, you may want to consider paying discount points.
If you do not have the money yourself, you might make a higher offer and ask the seller to pay the points for you. Most buyers can not guarantee where they will be living in seven years, and for most, the payment of discount points in this market is not a good decision due to the already low interest rates.