momar wrote:How do you know you will be able to refinance at a lower rate in the future?
The amount of rate buy-up for the initial purchase loan will be greater because there are more costs.
AmeriSave estimated costs for a $200k purchase loan:
$2,336.00 Closing Attorney/Agent, Appraiser, Title Insurance, & Credit Reporting
$1,084.00 Government Taxes and Fees
Compare that to AmeriSave's estimated costs for a $200k refinance:
$1,446.00 Closing Attorney/Agent, Appraiser, Title Insurance, & Credit Reporting
$61.05 Government Taxes and Fees
That's a difference of $1,913 which is almost 1 point for a $200k loan. And lenders tend to lower interest rates by 1/8 of a percent for every 0.5 discount points, so it seems like one could refinance for 1/4 percent lower.
The difference is even bigger if the lender credits on the home purchase cover home inspections that could easily total around $1k for a $200k house, and that's another 0.5 point. And potentially if you use the same title/escrow company from before (maybe you tell them ahead of time
), you could get a discount from them for being a repeat customer.
But the original question relates to getting as much lender credit as possible whereas the numbers just above look at getting the lender credits to match a no-cost loan. By going for even more lender credits on the purchase loan, the initial interest rate from the rate buy-up is even higher, so when switching to a no-cost refinance, the interest rate is more likely to be lower.