# The Math of Mortgage Rates

When you use financing to buy a house or apartment, your monthly mortgage payments are determined by several factors that include your interest rate—but the rate you’re offered is not always the final word.

If you happen to have some extra cash (lucky you) or are getting some kind of closing credit, one of the ways to lower the cost of borrowing is to buy mortgage points—also known as “buying down the rate,” “prepaid interest,” or “discount points.” Eli Sklar, a senior loan consultant at LoanDepot says. “Sometimes the lowest rate is not available unless you pay upfront to lower the rate for the life of loan.”

How the math works: One point costs 1 percent of your mortgage amount, or \$1,000 for every \$100,000. So one point on a \$400,000 mortgage would cost \$4,000. By making a single, one-time payment at the closing table, qualified applicants can permanently reduce their monthly payments every month. Here’s an example of buying points that would lower the rate by .25 percent. If you have a rate of 3 percent and are willing to pay one point, you would lower the rate on a 30-year mortgage to 2.75 percent for the life of the loan, cutting your payments each month from \$1,686 to \$1,633, a savings of \$53 dollars each month.

Does paying for points make sense?
To determine if it’s worthwhile to pay for points, consider how long it takes to break even, and how much is being saved over the life of the loan after that point, Sklar says.

“In this case, \$4,000 in costs divided by \$53 in monthly benefit tells us that this buydown pays for itself roughly in the first six and a half years for a 30-year loan. In the remaining 23 years, the homeowner would recoup over \$15,000 in interest charges,” he says.

“It is up to the homeowners to decide what makes sense for them. Especially in New York City, where the average length of time that a buyer keeps a mortgage is about seven years, this can definitely change the equation.” Sklar says.

Life happens: Jobs change, children grow up and out of schools. As a buyer you might think you’re going to stay in a property for a long time but end up changing course—and that’s an important consideration when paying for points.

An important consideration in NYC for buyers is having enough to pay your closing costs, including taxes, attorney fee, title insurance and more. In addition, co-op buildings can have steep requirements for post-closing liquidity. Some buildings want to see a year’s worth of mortgage and maintenance in an escrow account, some may want to see up to two years. In other words, you don’t want to spread yourself too thin. You can read more here.

Our team is here to advise you on what works best for you and your family. We work with the very best mortgage brokers in the city. We are also excited to share that Compass is launching its own mortgage company, OriginPoint, with the goal of shortening the time to close and to help reduce uncertainty and risk within the closing process.

Best wishes,
Stacey Froelich

###### Samantha Wortmann

Samantha Wortmann is a born and bred Manhattanite with Real Estate in her blood. As a member of the Stacey Froelich Team, Samantha brings a fresh new perspective and millennial skillset to a team with 20+ years of experience. With an unwavering work ethic and honest nature, Samantha is passionate about her product and creative in the approach. She creates strong relationships and elevates the experience for buyers and sellers alike.

With a keen eye for style, Samantha provides an imaginative vision for her clients. Along with natural talent, she brings an education from the New York School of Interior Design to the table making her an excellent advisor and executor of impactful home staging and interior design.

Samantha currently splits her time between the Upper East Side in a co-op that she personally designed and renovated, and a beautiful historic home in Ridgewood, NJ with her husband Robert and their newborn son, Tripp. In their spare time, the Wortmanns can be found playing with their dog, Goose, in Central Park, skiing in the Catskills, or boating off the coast of Connecticut.

###### Melina Marini

From the first photo-shoot to the final page of an impeccable board package, Melina Marini is there with her clients every step of the way. Her passion and expertise for the NYC market make her a valuable resource for anyone from first time buyers/sellers to seasoned real estate investors. Her approach to real estate consists of 4 major components: service, attention to detail, market knowledge, and integrity.

Melina is a dedicated professional who helps sellers by crafting a detailed marketing and pricing plan to attract financially qualified buyers, and gives each listing the time and attention it requires to sell quickly, and for the best price. When working with buyers, she relies on a combination of listening to and interpreting the buyer’s needs, in order to find the ideal home at the ideal price, in the most convenient timeline. She lives by a steadfast rule of being accurate and efficient, which has made her a client favorite.

Prior to obtaining her real estate license, Melina worked as a project manager for a Downtown Brooklyn condominium conversion. She is a graduate of Mount Holyoke College with a B.A. in Music Performance. During her down time, Melina enjoys spending time with her wife and
australian shepherd, Lyon, in their cooperative in Bay Ridge, Brooklyn, and performs internationally with her six person vocal band, Concrete.

###### Carolyn Levitan

As real estate is one of the most important and emotional decisions a person can make, Carolyn Levitan forges a true partnership with each client, understanding their unique needs in order to help them reach their goals. Carolyn acts as a trusted adviser through every stage of buying or selling a home. Seeing her clients appropriately invested and comfortably settled is Carolyn’s foremost priority. Her clients include everyone from first-time buyers to dedicated clients she has
helped through numerous purchases, sales, and investments throughout her 25+ years in the real estate industry. Each deal and each client are equally as important to Carolyn, and it shows.

Carolyn’s impeccable reputation, unparalleled knowledge, professionalism, and passion for the industry mean she is a go-to source not only among her clients, but also her colleagues. From
sitting on condo and co-op boards, to renovations and interior design, to handling new development projects from the ground up, Carolyn understands every facet of real estate from both professional and personal experience.

Originally from Sands Point, Long Island, Carolyn was raised by parents whose favorite hobby was buying and selling homes. Sunday family outings consisted of visiting model homes and real estate chatter. After raising her daughter on East 72 nd Street, Carolyn moved to Flatiron, where she has resided for the last ten years.

###### Mike Biryla

Michael understands how life-changing and stressful buying, selling or renting a home can be. He goes above and beyond for his clients in every aspect of the process, to ensure that this decision is easy and stress is minimized. “I treat your real estate needs with the ultimate level of care and attention, as if it were my own home. Quality service is always number one. I’ll work tirelessly on your behalf to protect your best interest and deliver results you’re thrilled with.”

A Licensed Real Estate Salesperson in the vibrant New York City market since 2013, Michael catapulted to success as a top-producing agent at his previous rental firm. He was the number one agent in his Upper West Side office two years in a row, and expanded into residential sales arena when joining The Stacey Froelich Team at Compass.

Michael specializes in sales and rentals in all Manhattan neighborhoods and is sensitive to the urgent nature of securing or selling real estate in New York. He is a skilled listener and negotiator with a flair for what he does, and great persistency to achieve success. Years in the hospitality industry taught Michael to be extremely detailed and customer oriented. Michael has the ability to relate to people from all backgrounds and walks of life. He makes a point to remember the little things about a client, from their kids’ and pets’ names to birthdays and anniversaries; because to him, relationships will continue long after deals are closed.Michael is a native New Yorker from Long Island. He lived in North Carolina for a short time but knew New York was his true home. Michael currently resides in Astoria, an area bustling with new development. Outside of real estate, Muay Thai is his biggest passion. Being a longtime competitive Muay Thai Boxer has fueled his desire to push himself to the limit and outperform under pressure. Family means the world to Michael and consumes much of his free time.

###### Robert Godby

New York is a city of serendipity, a fact Robert Godby can personally attest to. The path he walked to and from his former job at Mount Sinai Hospital led him past a real estate office window each day. “I would always stop and look at the floor plans and photos,” he says. In 2010, Robert decided to take the leap into real estate himself, starting as the executive assistant to the CEO of one of New York’s top firms and then as a licensed salesperson. Robert is a proud member of the Stacey Froelich Team at Compass since 2013.

Since then, he’s separated himself from the pack with his tenacious dedication, detail-oriented focus, and ability to maintain calm during any stressful situation. Robert specializes in sales and rentals in Manhattan and prides himself on being available to his clients, even after a transaction is complete. “I want to make the process smooth and fun,” he explains. “My favorite part of this job is meeting people.”

Robert combines his love for working with people, technology, and marketing expertise in order to make the buying and selling process as seamless as possible. A Philadelphia native, Robert holds a bachelor’s in political science from Radford University in Virginia. He has called New York City home since 2009, and in his free time, he enjoys running and staying physically active, reading and traveling.

###### Licensed Associate Real Estate Broker

Her love of architecture, interior design, and the elements of home are what most draw Carla to the world of selling real estate. This, combined with her passion for life in New York City and her in-depth knowledge of Manhattan make her a powerful partner for anyone seeking a home or apartment here. Carla believes that the purchase of any piece of real estate should ideally be two-fold. It should afford an opportunity for investment and capital appreciation, while acting as a sanctuary and emotional haven for the owner. Her goal is to deliver the highest possible quality service to enable both buyers and sellers to seamlessly achieve their financial and personal goals. Carla brings skill, dedication, honesty, and integrity to her work, as well as a sense of humor.

Having lived in Manhattan since graduating magna cum laude from the University of Pittsburgh, Carla has spent the last thirty years exploring the diversity of each of the neighborhoods within the city, and is well-versed on the landmarks and distinctive attributes of each, especially parks, restaurants, transportation, and services. Prior to entering real estate, Carla spent twenty-five years as a senior fashion executive who successfully built brands and grew revenue and profit within a variety of retail and wholesale venues. Carla’s expertise in design, merchandising, and marketing serves her extremely in real estate. Outside of work, Carla spends leisure time with her fearless Wire Fox Terrier, Asta, her husband David, and her two children. She enjoys working on design projects, theatre, antiquing, and spending as much time as allowed at her home in Bridgehampton.

###### Licensed Associate Real Estate Broker
Stacey grew up in New York and moved back to live in Manhattan after graduating from the University of Florida in 1995. Stacey began her career in residential real estate in 2001.  Real estate is the perfect career for Stacey due to her ability to connect with people, her ability to balance a fast-paced business, juggling many balls at once, and maintaining focus and organization throughout the process. Stacey heads her team of dedicated, hard-working, driven agents. Stacey is extremely conscientious in making sure all of her endeavors yield successful results for her clients, with no exception. She is driven to ensure her buyers find a place that feels like home and that her sellers receive maximum exposure with a goal to procure the most qualified buyer at the highest possible price.

Stacey truly sees the value in building long-standing relationships with her clients. She spends time with each of them to ensure they know she is there to support and guide them throughout this process. Stacey’s motto is that relationships are the key to her success, which is what makes her personal and professional life so fulfilling.