Cyber Monday is a day when we potentially end up spending a lot of money on gifts for friends and family. This Cyber Monday, Quicken Loans wants to put money back in your pocket if you’re in the market for a mortgage. It may be the season of giving, but today you can give a gift to yourself.

Today only, if you lock your rate on a refinance through Rocket Mortgage® by Quicken Loans, you get an extra 0.5 point off your closing costs. We’ll go over exactly what points are and the role they play in your mortgage transaction below. For right now, let’s start with an example:

On a $200,000 loan, you would be saving $1,000 on closing costs while getting the same interest rate with the 0.5 point savings. That’s money back in your pocket.

I know what you’re thinking. What’s a point? Let’s go over what points are and what they mean for your mortgage transaction.

The Value of a Point

Also known as a prepaid interest point or mortgage discount point, points are something you use to buy down your interest rate. For example, your interest rate could hypothetically be 4.25% and you could get it down to 4.125% by paying 0.5 point.

One point is equal to 1% of the loan amount. You pay for these points by bringing money to the closing table. You can purchase points in increments on the way down to 0.125 points.

Today only, you get the 0.5 point rate without bringing any extra money to the transaction. Some people may find that it makes sense to buy down their interest rate further. In order to figure out whether this makes sense for you, let’s do a little point math.

Pointers on Point Math

In order to determine whether purchasing more mortgage discount points to buy down interest rates makes sense for you, you need to determine how much it costs to buy the points and compare it to how much you would be saving on your monthly payment. After that, you need to make an educated guess on how long you’ll be in the house.

There’s a lot going on there, but it’s not too difficult to figure out. Let’s run through an example. These rates are completely made up, but they’ll help you get an idea of how to do the calculation.

On a $200,000 home, let’s say the zero point rate was 4.25%. By prepaying for two points with interest upfront in our scenario, you might get down to 3.875% on a 30-year loan.

To figure out the monthly payment difference, I’ve used our amortization calculator. Payments may vary slightly depending on state regulations. In Michigan, a homeowner can save about $43.41 every month on their mortgage payment by paying for the two-point rate.

Two points on a $200,000 house ordinarily costs $4,000 at closing. With today’s 0.5 point pricing special, the cost of two points is $3,000. Now that we know how much the points will cost and the monthly savings on payments, we can determine the breakeven point.

You do this by taking the cost of your points and dividing by your monthly savings ($3,000/$43.41). You breakeven and start saving money on the deal if you’re going to be in the house beyond 5 years, 10 months. If you have the extra money after your down payment and you plan on staying in your house beyond that point, paying two points to buy down your rate would absolutely be a good option.

Other Ways to Use Your Savings

For some people, it may not make sense to buy down their interest rate further when they have other things they can use the money on. You might choose to put money away for a rainy day or take the $1,000 that would have otherwise been spent on closing costs and put it in your child’s college fund.

If you’re refinancing your home, it may be to get funds to replace furniture and appliances to put inside it. Using the $200,000 loan amount we’ve been discussing throughout this post, we decided to look at the things you could get in your home by saving 0.5 point ($1,000).

Cut Closing Costs by Locking Your Rate on Cyber Monday - Quicken Loans Zing Blog

If you’re in the market to refinance, today just might be the day to move forward. The 0.5 point pricing incentive is good today only. If you’re ready to take the leap and save some money on your refinance, you can go ahead and get started with Rocket Mortgage® by Quicken Loans today.

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This Post Has 18 Comments

    1. Hi Robert:

      I’m removing your phone number to protect your privacy. This was a one-day online only pricing special. You could only get it if you applied through Rocket Mortgage. With that being said, rates are still low, and if you would like to speak with one of our Home Loan Experts today, you can give us a call at (888) 980-6716.

      Thanks,
      Kevin Graham

    1. Hi Helen:

      I can give you our rates page. It’s impossible for me to tell you what your rate would be in the blog comments. Every loan is different. Rates are dependent on things like loan type as well as your income, assets and credit profile. If you want a personalized rate, you can go through the Rocket Mortgage process. I hope this helps!

      Thanks,
      Kevin

  1. I looked into a refi deal with another company a few months ago and the costs were crazy high. There were also cost implications for pulling equity out as opposed to a straight refi. What are those cost differences with Quicken? Assume I have great credit, about 200,000 in equity, and a197,000 current mortgage at a 4.1 approx. interest rate.

    1. Hi Ann:

      I can’t give you that answer in the comments because I’m not a licensed mortgage banker and every loan is different. That being said, Rocket Mortgage does allow you to compare costs and you have some freedom in structuring your loan to keep closing costs to a minimum.

      If you would like, one of our home loan experts could give you a lot more info on the details either via chat inside Rocket Mortgage or by phone at (888) 980-6716.

      Kevin

  2. I have my Loan with quicken loans and want to refinance this loan. Whenever I call the customer service for help , the service is so poor that I loose interest in the whole refinance project.
    I will Refinance my Loan sometime but not with quicken loans.
    Sorry for the poor feedback but I have experienced poor quality of service more than once.
    Thanks. Ram

    1. Hi Ram:

      I’m sorry to hear about your poor experience, but we appreciate your honest feedback. I’m going to get this to our client relations team to see what’s going on in your case and look into anything we might be able to do to turn this around.

      Thanks,
      Kevin Graham

    1. Hi Alvin:

      I have a few suggestions for you, although they won’t raise your credit score today. You’ll be prepared for the future.

      First, check out our friends at QLCredit have a service that allows you to get your VantageScore 3.0 credit score and report every two weeks from TransUnion. More importantly than that however, you’ll receive insights into why your score is the way it is and where and how you can improve, all done on a personalized basis. This blog post also has some great general tips on building up your score. Finally, I’m going to recommend you speak with one of our Home Loan Experts. They may be able to help you devise a game plan to bring your score up to where you can qualify. You can get in touch with us by calling (888) 980-6716. Hope this helps!

      Thanks,
      Kevin Graham

  3. It would be nice to know the approximate rate and a closing cost estimate before I go any further. I do not have time to waste entering information if the rate is too high or closing costs are too much.

    1. Hi Denise:

      Everyone’s rate is different based on their personal financial profile and the type of loan they’re getting. We would need some information regarding your income, desired property type, assets and credit before giving you a personalized rate. That being said, we do have a rates page where you can see what our current advertised rates are as well as the assumptions underlying those rates. If you do decide this is worth looking into, it only takes minutes to apply through Rocket Mortgage because we’re able to import a bunch of your information around assets and income from our trusted partners. You then pull your own credit. Hope this helps!

      Thanks,
      Kevin Graham

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