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Strategies & Market Trends : Action & Options- Taxikid plays
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To: Druss who wrote (3997)3/27/1998 5:39:00 PM
From: Allan F  Read Replies (2) of 4339
 
Druss, or any other linkmeister,

I would like to get historical data for 30 year Tbill rates.

Having said that, I am refinancing my house and am trying to decide how to go.

Options:
1. 30 year at 7.5% now,
2. 1 year ARM that will be 6% this year and more than likely 8% next.

That latter gives an average of 7% for two years. Come the third year I will probably have to refianance at current rates as the adj is usually pretty high.

Since I am paying back at an accelerated rate, I expect to only have 10 years of payments left after 2 years. I am thinking that saving 0.5% for the next two years will be worth the risk of higher rates in '00 since the principal will be so greatly reduced. This is what I should have done last year when I bought, but I didn't fully understand all the nuances of mortgages, and I thought rates would be going up. In retrospect 8.375% for 30 years seems to be historically pretty high and worth the risk of guaranteed 7% for two years, but I don't have any data to know for sure.

Any thoughts?
-Allan

P.S. 15 year fixed is not really an option as I don't want to saddle myself with guaranteed higher monthlies.

P.P.S. For you hard core number crunchers, non-refundable grease costs are ~$500 (Appriasal, Title Insurance, credit report, etc.)
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