The optimal thing to do is to lock in your interest rate.
More Quotes from Keith Gumbinger:
Does that mean (consumers will) stop borrowing because it costs them another 5 a month Probably not. It may influence decisions. I don't think it halts decisions.Keith Gumbinger
These loans can be of value for people who want to save or invest the money they would have paid in principal, ... Unfortunately, the way the product has been pitched, borrowers have been encouraged to stretch their budget to buy more house.
Keith Gumbinger
The risk with an ARM is that when interest rates rise, you could end up paying much more than you bargained for. You're subject to the vagaries of the market, ... You want to maximize the fixed-rate picture to match your time frame.
Keith Gumbinger
If you plan to be in your house for decades, on the other hand, you might consider paying points to lock in the best long-term rates. Points, which cost one-half of a percent to 1 percent of the loan and are paid up front, let you buy a better interest rate. If you pay points up front, it's harder to get your money back, ... When rates are high, borrowers have to pay points to trim rates any way they can, but with rates so low there is really no need to pay those points.
Keith Gumbinger
They're trying to make home prices more expensive, so some of this speculative activity will decrease, and incomes will have a chance to catch up.
Keith Gumbinger
If you're the gambling sort, you could get into an interest-only product and bet that the market will build equity for you.
Keith Gumbinger
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