How rare is it to buy down permanently? We are being presented this option and I am leery because temporary is all I've ever known.

This is VA loan with USAA.

I was not on the call when this was discussed but made sure to have the question asked if that was temporary, how long, etc.

Lender points are the most misunderstood aspect of mortgage lending IMO. You have to view rate and points/fees holistically. Using points to buy down fees is perfectly normal, but like anything else, it can be abused. Especially recently with rates jumping I've seen unscrupulous lenders bump points to crazy amounts to make their rate look very attractive to an unknowing borrower. So if you know what you're doing, go for it.

Last thing before I go. Why not give a good Aggie lender on this forum a shot at your business? There are several that I'd be happy to recommend, and your overall rate / cost will likely be cheaper than what USAA can offer.

Buying down the rate is very common. I present that as an option to almost all buyers. Historically a buy down is about a .250% but today it is more often .500%. So, it is just a math problem on how long you expect to stay in the house. When does the monthly savings pay back the initial upfront outlay and is that in your expected time frame.

Of course the wild card in the current rate environment is if your crystal ball says overall market rates will drop a point or two over the next few years. if that is the case you might not have wanted to buy down.

My quick calculation says we would break even in 3 years. We will def be there that long and will likely keep this home regardless.

SoTheySay said:

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My quick calculation says we would break even in 3 years. We will def be there that long and will likely keep this home regardless.

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Kind of tricky, but the calculation should be based on how long you will have that debt on the property. If you expect rates to drop next year, and are able to refinance then, then 3 years isn't worth it. If you don't refi or sell until after three years have passed, then you should buy down.

Do y'all believe we will be back under 5%? Either in the next 3 years or ever? Mostly just curious of your opinions. I feel like I've accepted that 5% is "good". (As much as I hate it.)

I have no prediction. I was just sharing what people I talk to daily are telling me. I got into banking in 1979 and over the last 50 years rates at or below 5% are the exception rather than the rule.

https://fred.stlouisfed.org/series/MORTGAGE30US