Posted on: 11th Oct, 2010 09:07 am
It perplexes me how people want to pay higher interest rates on loans that they never use. Why get a 30 year fix loan if the longest most of these people pay on this loan for only 2-7 years?
I would think that getting a 5/1 ARM or a 7/1 ARM would be the best way to go. Are people not capable of watching the LIBOR/COFI/Treasury Index to see if they would even need to consider refinancing if the index drops?
Maybe it's just our society and people are ok to pay more for security.
I would think that getting a 5/1 ARM or a 7/1 ARM would be the best way to go. Are people not capable of watching the LIBOR/COFI/Treasury Index to see if they would even need to consider refinancing if the index drops?
Maybe it's just our society and people are ok to pay more for security.
That is exactly why I speak with my customers and discuss their future plans before locking in on any particular program. It is true that if someone knows they will not be in the home for more than 5-7 years, then it makes no sense to get a 30 year fixed. There are many other loan options with lower interest rates.
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