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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Tommaso who wrote (4026)	4/9/2004 1:44:29 PM
From: mishedlo	Read Replies (4) \| Respond to of 116555

I disagree - I think it is excellent advice. The odds of US rates rising 2% any time soon are preposterously low IMO. I am switching over to an interest only libor loan right now. Paperwork in progress. We will contine making the same payments as before and pay off the loan much faster. fixed rates are about 5% this is only 3%. That is a 40% reduction in interest expense! It takes a full tow point rise for one to even start worrying about higher rates. Best of all it is an interest only loan. Should something happen to my wifes job, we only have to make the bare minimum in payments. about 60% less that current payment. As long as we have jobs we will keep making the same payments as we are now. We have ZERO credit card debt and no auto debt. We also have about 70% equity in our house. I think this type of product is a great idea for anyone who has enough resolve to keep making the same payments as before. If not, a straight ARM works as well (but does not have the flexibility of making interest only payments in case of emergency). I repeat my ascertation that we are in a LONG LONG period of falling or steady interest rates just as Japan. Unless and untill we see wage inflation and REAL job growth (not just part time BS), this FED is not hiking. If and when they do hike, it sure will not be 2 points any time soon. Mish