[quote=bearishgurl]n(a true “option ARM” which doesn’t exist today under the former terms), they would have an interest rate today in the 3% range. They would be paying ~3.6% with a 2.5% margin and ~3.85% with a 2.75% margin. In previous years, the COFI index has been as low as .931% (in Sept 14). Those (now few) borrowers still left on the COFI train have been able to take advantage of current low rates without lifting a finger!
after paying 4 years of $150 annual fees and having already paid $600 in annual fees (which almost covered those two “free” RT plane tix I rec’d),
I get 6% cash back in all standalone grocery stores and 3% cash back at all standalone gas stations. Now THAT is my kind of card!
You posted that the opportunity for “no-cost” (to the borrower) mortgage loans may never happen again, HLS. When did they start to “come into vogue” and when do you think they will become unavailable?[/quote]
Options ARMS were promoted by the lowest of the low.
Downey Savings, Country Wide & World Savings were 3 of the most aggressive. AN absolutely disgusting product that paid huge commissions and were ‘weapons of financial mass destruction’
The reps made a small fortune and truly had NO IDEA what they were selling and what the risks were.
I studied them and decided that I would NEVER offer one and I never did.
There was an index + a margin. What most people don’t know is that there were multiple options for the margin.
The higher the margin, the larger the commission.
Many mortgage lowlifes put their friends, relatives, neighbors & clients into OA’s with high margins because of huge commissions & low payments that very few people understood.
As you put it, ‘Lifting a Finger’ could save people tens of thousands of dollars… and have ZERO risk of future rate increases.
NOT LIFTING A FINGER has cost money and there is future risk of rate increase.
Not something I would do OR recommend.
BG, you took a chance that most people shouldn’t take.
In hindsight, assuming that you could qualify, you would have been MUCH better off doing what AN & FLU did, pocketing money all the way down, and today refinancing into a 10 or 15 year rate, FIXED and lower than you are quoting, still variable.
You’d still be on the track you’re on,, with no rate risk. I understand that you can pay it off if you wanted to…I agree with FLU that it makes little sense to be collecting 1% and paying over 3%.
5YR & 7YR ARMS exist today, with a 5% cap; not recommended for someone with a long term horizon.
the lender credits are not as big on ARMS, but the rates are a bit lower
You should have cancelled your AMEX card after the 1st year, the points were already in your Rewards acct if you hadn’t used them. There was no reason to pay 4 years of annual fees.
I believe Preferred Blue has an annual limit at Grocery stores.($6000 spend = $360 rebate limit & $75 annual fee?) Most gas stations charge a premium to use a credit card, what are you really saving ??the Costco option with AMEX ends June 19th.
THAT is NOT my kind of card.
I can save 3%-5% at ARCO AM/PM with credit card… I’d rather get $500 credit my way, I’m glad yours works for you.
I rarely book a hotel room directly, the flexible options at Hotwire & Priceline usually get 4 star rooms (Sheraton, Marriott, Hilton, Hyatt, Suites etc) for the price of Motel 6 or Best Western
Lastly, my comment about will never happen again was referring to the opportunity to refi 5-10 times in a declining interest rate environment as FLU & AN did.
Credits from lender to cover all closing costs have been available for over 10 years but spreads were different.
I don’t see these going away any time soon.
Most people who chose to pay anything for a primary residence loan in the last 5 years probably made a mistake, although some may not of had an option for various reasons.
It’s more difficult to get a rental property loan at no cost because of pricing hits
