Buy Now, Refi Later? How to Stress-Test Your First Mortgage
Quick pulse (today): 30-yr fixed averaged ~6.19% this week. Denver’s median sale price sits around the low-$600s, and listings are taking ~38–45 days—enough runway to negotiate credits. Translation: credits > price cuts for first-timers right now.
The math (simple, Denver-sized example): $600K purchase, 10% down → $540K loan. At 6.19%, P&I is about $3,304/mo.
2-1 buydown (seller-paid): Year 1 at ~4.19% → ~$2,638/mo; Year 2 at ~5.19% → ~$2,962/mo; then back to 6.19%. Total temporary payment relief ≈ $12,100 across two years. That’s your target seller credit. Best if you expect to refinance within ~24–36 months and want breathing room early.
Permanent points (you- or seller-paid):
Roughly 1 point (1% of loan = $5,400) often lowers the rate ~0.25%.
Two points (~$10,800) might take you to ~5.69% → ~$3,131/mo, saving ≈ $173/mo.
Breakeven ≈ 62 months. Points pencil when you’ll keep the loan 5–7+ years and refi odds are low.
How to stress-test:
Qualify at the “no-buypdown” payment.
Budget as if refi doesn’t happen soon.
Prioritize credits: 2-1 buydown → inspection/roof/sewer/HVAC → timing (rent-back).
Lock a rate you can live with; treat refi as a bonus, not a plan.
Bottom line: If you can win a ~$12K seller credit on a home that’s been listed 30–70 days, a 2-1 buydown buys time. If you’re planting roots for the long haul, points can make sense—just check the breakeven.
— Andy | Your Denver neighbor + data-driven Realtor®
#DenverRealEstate #FirstTimeHomeBuyer #MortgageTips #HomeBuying #ColoradoRealEstate #Refi
