Adley said: @Reagan
Yeah the rates are absolute garbage and so is the LO. I got $30k in credit so its probably not worth switching.
Who is the builder on this? Very normal for builder lenders to play games but they usually take the opposite approach and use the credit to give you a temporary rate buy down.
If you really don’t like them, refinance immediately. It’s conventional so no waiting period to do a rate reduction - you could start the process the day after you close. When a loan gets paid off within 6 months, most places will get their commission clawed back and at that point you’ve already gotten the credits from them
If you go that route, ask for a higher rate now that doesn’t have points. That will be a complete waste of money in that scenario. If you can stomach the payment, take a rate that gives lender credit to cover some of the other costs.
@Reagan
That is what I plan on doing purely out of principle. If you refinance immediately, does your temporary buydown balance in escrow still get applied to principle? After closing costs, I still have enough for a 2-1 buydown and I’d rather use it on temporary buydown since that can transfer over to your principle.
@Adley
Generally speaking yes but it can go either way so be sure to carefully read the documents. For that kind of money the cost of a quick attorney review may be well worth it
The other place you could potentially burn some money if you have credit leftover is prepaid interest - closing in the 1st couple days of the month will do the trick (long explanation). They’ll probably try and tell you they’ll do a “free” refi or that you have to wait x amount of months to do it.