[quote=asianautica]
I think I’ll side w/ HLS on this one. If you don’t have a few grand to buy down rates, then you’re probably extending a little too much to buy the house. If you are not sure of your job security, then you shouldn’t be buying a house. Point is, If you can’t afford to pay a few grand up front to get you a better rate, you should rethink the house you’re buying. It might be too much for you. Pay a few thousands up front will save you tens of thousands over the life of the loan.[/quote]
Just because you have money to spend it on paying a few grand up front doesn’t mean you should spend on it. I could probably pay 40% down or more to get the best rate HLS refers to, but it may not be the best option for me. With extra cash, there are unlimited options. I could buy another investment property when the time is right. I could invest in my favorite company (or even start up my own company) when the time is right. It really depends on how much difference the mortgage rates are (typically they are small differences) and what your alternative options are. You might think that you saved tens of thousands over the life of the loan but your opportunity costs might be even higher.
