Posted 11/23/2012 07:33 (#2711977 - in reply to #2711926) Subject: Re: Variable? NO WAY!!!
I can easily afford 4.125. I paid 18 in the '80's. I can also sleep well. 2.5 variable isn't available here, anyway. My math shows a one point per year cap means in 4 years I could be paying double what I do now, all because (if I had done a variable) I was trying to squeeze that last point out at the beginning....
Talk to any of your neighbors who lived and borrowed during "the 80's". I am POSITIVE they will tell you variable rates are what crippled them. Of course most of the guys you should talk to aren't farming any more as variable rates caused them to lose everything. I'm glad its so hilarious to you--I was in the thick of it back them and believe me, bankers being shot, farmers hanging themselves--it didn't seem very hilarious to me or to the widows left behind.
"you can always change out for little or nothing"--not once interest starts to rise you can't!
I see nothing hilarious about any financial stuff. A variable-rate loan with a term of 3-5 years would be ok as TODAY we can see no evidence of runaway rate increases. 15-30 years is a long time. I am an odds player, I always stack them in my favor. Variable interest stacks the odds in the lenders flavor, but as long as guys are chasing pennies and are willing to risk everything, variable rates will be an option.