Are buying point a good idea with todays interest rates

[Rose Frantz]

I just purchased my first condo at int rate was 5.8% - do I buy points to get this down a bit or leave it and refinance in the future if rates go back down? HELP!

[Riaz Gillani]

Tough question to answer without knowing your time horizon and your exposure to other vehicles of investment. 

Re: Time Horizon, for the average 30 YR Mortgage, 0 to 2 points are generally worth paying up front if you intend to stay in the loan for greater than 5-7 years. But this is without discounting or accounting for inflation. In today's economic environment, we have an inverted yield curve and inflation at 9% - so neither are none-factors by any means. 

Re: exposure to other vehicles of investment, think opportunity cost. If you don't buy down your rate - what else would you do with the money? Would keep it in a low-yield savings account? If so, buying down the rate is probably a good option. If you are someone who invests in stocks or bonds or other securities and have somewhat consistently generated returns, keep the cash today and go that route not only because of the higher return but also the added liquidity.

Best of luck :)