Mortgage Loans

[proton022]

I'm planning to buy a house now, and I expect to sell it off in 4/5 years. 

Would I be better off if I get a loan with negative points, i.e., I get credit from the bank while closing? If I get credit, then I'll have to pay extra interest, but I believe that interest is spread over the duration of the load. So, if I take a 30 yr loan but sell it off in 5 years, won't I acturally profit by choosing a loan with negative points? 

The opposite is true for positive points. That is, if I pay upfront, say 1 point, but sell my house in 5 years, then I'd lose in the end, because I don't benefit as much from a lower interest that I got.

Am I understanding this correctly?

[Walt_K]

Yes, you're understanding it correctly.  Of course, things change and maybe you end up staying longer than you thought.  But all you can do is make a decision based on the best information available to you.

Make sure you shop around as well.  I recently bought a new house.  The first 4 lenders I spoke with were all pretty close to each other at 4.0% for 30 year fixed with no points.  The bank I ended up going with gave me 3.75% for 30 year fixed with a .875% credit.  So by shopping around, you might be able to get the credit and a better interest rate. 

[proton022]

Walt_K

Great job on landing a good offer. Would you mind sharing the name of your lender? Please feel free to message me privately if mentioning lender's name would violate the forum rules.

[MarineVietVet]

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proton022 wrote:

Walt_K

Great job on landing a good offer. Would you mind sharing the name of your lender? Please feel free to message me privately if mentioning lender's name would violate the forum rules.

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Lender names are just fine.

[Walt_K]

Eagle Bank.  It's a local bank in the Washington, DC area.  Not sure if they lend for properties outside this area, but can't hurt to ask.