[quote=livinincali][quote=AN][quote=FlyerInHi]Flu, I think you’re saying that “no cost” loans are better because they allow you to refinance again and again, guilt free (loss avoidance. You’re not “throwing away” out of pocket fees. That’s the marketing angle.
But past is past. Make decisions based on what you know today.[/quote]
Do you have a crystal ball i can borrow?[/quote]
It’s probably safe to assume that secular trend of steadily lower and lower rates from the early 1980’s until now is coming to an end. Not that rates will rise significantly from here but mid 2’s maybe 2 is probably the lower limit. It might make sense to pay a little bit for a lower rate now where as in the past 30 years it probably didn’t. Of course you didn’t necessarily know that at the time.[/quote]
That’s exactly what I thought 8 years ago when it was at 4.75% and I paid dearly to get it down to 4.5%. I had the same think you just laid out. I stop trying to time the bottom. Also, at 1/8%, we’re talking about $13k over 30 years, which isn’t big enough of a saving to take the risk by paying ~$2500 for. IMHO.
This isn’t considering what inflation look like over the next 30 years. $2500 is today $, while the $13k saving is over 30 years. If we experience another 70s/80s high inflation period, then the saving isn’t all that big.
