I was curious if any mortgage lenders were getting in on the Black Friday and Cyber Monday deals, and it turns out at least one is.
Unsurprisingly, it’s Quicken Loans, one of the largest retail mortgage lenders out there. I looked for more deals but none turned up.
Quicken Offering Half a Point Off Closing Costs Today Only
Today, and only today, since that’s how these Cyber Monday deals work, the company is offering 0.5 points off closing costs if you lock your rate on a refinance via Rocket Mortgage.
That’s actually quite a bit of money depending on the loan amount, and likely more than you’ll save on a blender or big screen TV through the more typical Cyber Monday offerings.
It appears you can also use that half point to buy down your interest rate, if you so choose, which could save you even more money over the life of loan, depending on how long you hold onto it.
If you could use that half point to move the interest rate an eight lower, it would result in a lower payment each month, potentially for 360 months. And you’d pay less in interest and pay down your loan balance faster.
Is This Cyber Monday Mortgage a Good Deal?
Like all Cyber Monday deals, we have to assess the potential value to ensure it’s actually a good deal, and not just another frivolous purchase.
As mentioned, you have to lock your rate today, and it has to be a refinance. That means you have to be happy with today’s pricing.
For example, if the rate you’re being offered today is 4% on a 30-year fixed, that’s what you’ll get if you lock, even if rates decline (improve) over the next week.
At the same time, they could also rise, making a lock a good choice. But there will obviously be increased pressure to lock today in order to get that point discount.
One could argue that the half point is a big enough discount to offset any near-term rate improvement.
But you also have to consider current mortgage rates, which might be priced more attractively elsewhere.
Essentially, you have to factor in the rate and total closing costs after all discounts to see what the best deal is.
I liken this to a company that offers a 20% off coupon. While it sure sounds good on paper, you have to consider the starting price and what the 20% discount actually accomplishes.
If the price is higher after the discount, it doesn’t matter what the discount was. Heck, it could be 50% off, but if it’s still more expensive after the fact, it don’t mean much…
Assuming you’ve already decided to go with Rocket Mortgage, today night be a really good day to lock to get that big discount.
Mortgage rates haven’t done a whole lot lately, though with end of the year tax legislation looming there could be some significant swings ahead.
(photo: Marco Verch)