[quote=harvey][quote=bewildering]My first refi was to 4.0%, but the rates that day were 3.9%. [/quote]
So your “no cost” loan cost you 0.1%
There are scenarios where one can come out slightly ahead in cash flow if they take a “no cost” loan and pay if off before the full term. But then there is the opportunity cost of paying off a low-rate, long-term loan early, which the “pay off my mortgage early” crowd always ignores.
And any mortgage broker claiming that a loan is “no cost” is just plain misleading…[/quote]
Yeah, there’s also opportunity cost of not making an investment in a higher return. There’s also the opportunity cost of picking the wrong investments and losing more than if you just paid down your mortgage.
As much as I’d like to think I can always be correct and pick the right stocks/equities/investment, last year taught me I can’t really beat the markets. And last year, dow was flat to slightly negative.
Also, the opportunity cost of a “safe” CD is like 1% return, unless you ladder them…That’s still lower than most people’s mortgage rate, so simply holding onto cash you really aren’t losing that much opportunity cost. You can take a chance that eventually rates will rise above mortgage rates. I personally don’t know when that will happen. Maybe 5 years, maybe 10 maybe 15.
That said, most of the rest of you can probably beat the 2.5 to 3%. over a longer period of time, if I didn’t have so much already tied in equities, I probably would have taken the risk and stuck it out.
