This would free up cash now, while still minimizing their exposure to rising rates during the period they expect to remain in the house.
More Quotes from Keith Gumbinger:
This is very popular right now because it lets you draw some money out of your home and improve cash flow. If you do this, resist the temptation to draw too much equity out of your home.Keith Gumbinger
The question you need to ask yourself is, why would a bank be pitching you this product at this time The obvious answer is that bankers believe rates will rise in the future. Getting you out of a fixed loan and into a variable one helps ensure profitability on your account.
Keith Gumbinger
But all of that has changed in just a matter of months. Lenders don't have people beating down their door for their loan, ... You're more in the captain seat than you were even a week ago.
Keith Gumbinger
If you're making a pre-payment on your mortgage principal, ultimately you'll pay less interest,
Keith Gumbinger
In many markets, it's possible to borrow at prime or even a quarter to a half a percentage point below prime.
Keith Gumbinger
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