Refinancing and rate difference

I am thinking to take a mortgage aiming to refinance in the future when the rate drops. If I were to pay for a better rate now, could it positively affect the refinancing in the (relatively near) future and offset the cost of points?

For example, let’s say that now I can choose either a 5.5% rate or 5% + $5000 for points. Let’s say I think that the rate will drop to 4% in a year. Of course, paying $5000 for one year of 0.5% difference is not worth it. But, would I get a better deal in a year when refinancing from 5.5% to 4% vs from 5% to 4%? Does the rate difference during the refinancing affect the new rate or closing costs?

submitted by /u/Nameless_11
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I am thinking to take a mortgage aiming to refinance in the future when the rate drops. If I were to pay for a better rate now, could it positively affect the refinancing in the (relatively near) future and offset the cost of points? For example, let’s say that now I can choose either a 5.5% rate or 5% + $5000 for points. Let’s say I think that the rate will drop to 4% in a year. Of course, paying $5000 for one year of 0.5% difference is not worth it. But, would I get a better deal in a year when refinancing from 5.5% to 4% vs from 5% to 4%? Does the rate difference during the refinancing affect the new rate or closing costs? submitted by /u/Nameless_11 [link] [comments]

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