Do you ever pay points on a new loan?

[Seth Levey]

I'm under contract for a 4-plex and considering various financing options. I'm a buy-and hold guy so I plan to hold this for several years. Options are 5.625% with no closing costs, 4.625% with closing costs and 1 point, both 30-year fixed, or 4% with closing costs and 1.5 points for a 5-year ARM. In the past I've gone with the higher rate and no-cost option but it might make more sense to get the lower rate now anticipating rates may go up. What would you do?

[Max T.]

On a fixed rate loan it doesn't matter what rates do after you purchase.

Sometimes it makes sense to buy down the rate if you know you're going to hold for a long time. It's really up to you.