Reply #25: That's funny, I just refi'd with an IO loan :)

[Xithras]

Took $40,000 out of my house and dropped my payment from $1,700 a month to $900 a month at the same time.

No, I'm not an idiot, I'm remodeling. The loan guy was flabbergasted when I told him that this loan was only temporary and that I'd be refinancing again in a few months. He'd spent two weeks explaining to me that IO loans are the best thing since sliced bread, and 5 minutes after signing I looked him in the eye and told him that IO loans are for suckers. They ONLY make sense on loans that you're planning on holding for extremely short periods (why pay the higher interest for a 30 year fixed when you're flipping the loan in four months?)

I do have to admit, though, that many of these loan guys do have a point. You'll pay a much higher comparative interest rate for a 30 year fixed, but very very few buyers actually own their homes for a full 30 years nowadays. It doesn't make financial sense to pay extra for a long term loan that you'll never fully utilize.

When I refi again, I'm already looking at a 30 year ARM with a 15 year lock. It'll save me a half percent over a 30 year fixed, but since I'm only planning on holding this house another 15-20 years it'll end up saving me a lot of money.