Go to Jeff Salisbury LWGate Home Page.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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