Paying points for a Loan

[Kristi K.]

We are in the process of getting another DSCR loan. What do you all think are the pro's and con's of a 5 yr ppp in the mid 5% range vs 3 yr ppp in the mid 6% range. I'm getting mixed signals about paying pts from lenders and I'm genuinely interested in hearing some of the logic behind which is best for this loan that we are about to do. Just for some info, we have to do DSCR loans at this point in our life and we will not be selling in the next 5 years. I personally don't see a problem paying a couple of extra pts for a 1% reduction in the loan but some people I know are very adamant that we shouldn't be paying pts at this time in the game. Any thoughts?

[Brandon Croucier]

I don’t see anything wrong with paying points if you like the rate, getting it to a level you like is just personal preference.

You’re either going to pay it on the front, or the backend.