Re: The NPNC refinance question, another view.

From: hic@world.std.com (Howard I Cohen)
Subject: Re: The NPNC refinance question, another view.
Date: Fri, 16 Oct 1998 11:15:51 -0400

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> Subject: Re: The NPNC refinance question, another view.
> 
> Dear List:
> 
> Several days ago I commented on my preference for NPNC mortgage loan. Got
> several inquiries and in my reply to one of them, I made the following 
> observation. It is not at all analytical, but does offer a very good 'gut'
> perspective of my philosophy on the matter. Let me share it with you. 
> 
> 
> Consider how the lender, typically a bank, likes to look at the question.
> The bank likes it the other way, namely, when you pay points up front.  > 
They get the money up front at the price of a little lower rate that takes
> 4 to 5 years to equalize. They know that either they'll sell the mortgage 
or
> you'll buy a new house or refinance, or even - God forbid - you'll drop 
dead. Something will end that mortgage before pay back is over.
> The're happy, they got a chunk up front. My argument is to put the odds 
> the bank assumes into your court, and run the gamble the other way. Pay 
> nothing up front, a little more each month and see how long the mortgage 
> survives. With fluctuating rates-refi opportunites, upward mobility-new 
> house, etc. the odds are with you or at least it's worth the risk.
> 
> Thanks for listening.
> 
> Howard I. Cohen <hic@world.std.com>
> 
> 


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