This is a YouTube video titled "🚨 Cost of Waiting - Refinance 🚨" containing a monologue or presentation from October 5, 2021, discussing the financial implications of refinancing debt and the cost-benefit analysis of waiting for interest rates to drop. The speaker explains why locking in a refinance deal now is often better than waiting for potentially lower rates.
Life scenario I think everybody should know about. So I've got a client looking to refinance and consolidate a bunch of high interest rate debt. It will save about $600 in total payments. Their idea is maybe we made out the market, maybe rates get a little bit lower. So let's play that out. In a perfect world, let's say rates do get an eighth lower the next two months. That would save them an extra $25 a month. But while they did that, they were paid $600 a month for the additional two months, $1,200 in total to save 25. It takes you 48 months or four years to recoup that. So more times than not, it's better to lock in the sure deal today as opposed to waiting. Because in reality, there's more upward pressure on rates, if anything. But even in a perfect world, they don't necessarily save.
