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Is going with a lower downpayment and buying down the rate the obvious choice in this example?
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Hey guys, I had my lender run some numbers for me on a potential home purchase. They returned with two potential options:
- 20% Down
- 15% Down, buying down the rate and MI.
To me... it looks like the second option is the better one because lower closing costs and lower monthly payments. Am I missing something? I read a lot that buying the rate down doesn't make much sense. Is there another scenario that would make more sense than these two?
| Description | 20% Down | 15% Down, No MI, Rate Buy Down |
|---|---|---|
| Purchase Price | $780,000.00 | $780,000.00 |
| Loan Amount | $624,000.00 | $663,000.00 |
| Down Payment | $156,000.00 | $117,000.00 |
| Rate Points | $- | $13,260.00 |
| MI Buyout | $- | $2,917.00 |
| 2% Estimate for Closing Costs | $15,000.00 | $15,000.00 |
| TOTAL CASH TO CLOSE | $171,000.00 | $148,177.00 |
| ESTIMATED MONTHLY PAYMENT | $5,379.00 | $5,311.00 |
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