Unpopular opinion: I used to think a 30-year fixed was the only smart move, but after closing a $850k construction-to-perm loan in Phoenix last month, I'm never going back.

3 comments

3 Comments

Used to agree with thomas.parker about fixed rates, but seeing that kind of savings upfront makes you rethink the whole safety thing.

thomas.parker24d ago

Guess you've never had the joy of locking in a rate and then watching the market drop half a point the next week. That construction loan life sounds like a fun way to keep your blood pressure up forever. I mean, committing to that kind of ride on an 850k loan takes a special kind of nerve. Maybe it's just me, but I like knowing my payment won't change because the Fed had a bad Tuesday. To each their own, but that feels like choosing to play financial dodgeball.

fox.derek24d ago

Ever wonder why anyone would pick a variable rate? I used to be all about the fixed rate safety too. Then my buddy built a house with a construction loan that turned into a five year ARM. He saved over two hundred bucks a month compared to the fixed rate at the time. That extra cash helped him finish his kitchen way sooner. Watching that work out changed my whole view on taking a little risk.