Posted by PJM/MI on 11/2/06 9:27am
Msg #156818

The Re-Fi Game.. Post

(Sorry about the N/M post.. hit enter by mistake).
I am so amazed at the re-fi's I do over and over again for borrowers. I wonder if any one EVER pays off their mortgage in 20 or 30 yrs. anymore.
It seems the biggest "culprit" for all of this is the credit cards! I wonder how in the world these people get so many pieces of plastic and use 'em up like it's "free" money.
And what about all those wonderful ARMS's and I.O's a few years ago?
If it weren't for the cards and the ARM's, the re-fi game would be over.

Reply by Teddog/CO on 11/2/06 9:41am
Msg #156822

I think it's called being "lulled into false security." What a shame that people can't grasp the concept of buy only what you need, and can afford. I see Hummers where perhaps a nice Bronco would be a more practical choice. Unfortunately, young people want it all. In the real world it just doesnt work that way. You shouldn't spend what you don't have, credit cards and easy to get loans have created a very scary problem. You just can't live off credit. Just my opinion.

Reply by JS_MD on 11/2/06 10:10am
Msg #156827

I am reading this as I print docs for my THIRD refi in a year for the same borrower. You would think they'd realize the settlement charges really add up......especially three times in one year.
Heaven help them when the property values dont escalate as rapidly as they have been in the past couple years in this region. When I confiirmed with her last night she said she is paying off credit cards (again) and putting $20,000 down on an escalade...........she has now "maxed out" her equity in the home. When I first refi'd her she had $100,000 in equity, its gone now.

Reply by Jason on 11/2/06 10:42am
Msg #156833

Don't be so quick to judge

I see most refi's here 4 paying off credit cards, too.

But the cards aren't Macys.

The charges are for basic living exp:
supermarket
gas
car repair
medical
dental

When I go to the hse, I see old cars, not new ones. Kids don't have electronic game toys. etc

Out here in the west, housing $ is way up but salaries are still down. And DC is still acting like the recession has been over 4 yrs.

Refi's are how people are making ends meet. I have friends w/ MS degrees making only $20-$35K a yr. And theyre the lucky ones - they work in medical and govt.

Yr right - refi's use up the equity in their hse. Jeopardizing their retirement.

Tragic + scary.

Reply by SueW/Tn on 11/2/06 12:36pm
Msg #156865

I agree with Jason on this one, don't be so quick to judge

because one major medical problem can literally sink someone who thought they were set for life. I know, I've personally been there and done that. And it doesn't have to be the borrower's personal injury case, it can be their elderly parents, a child, even a best friend that's been hit with the high cost of medical services. One bout of cancer with chemo and radiation can whittle savings down to zero within 6 months.

Reply by Teddog/CO on 11/2/06 12:59pm
Msg #156872

Jason and SueW

Please do not misunderstand my statements. I've been there and done that with the medical bills, so I clearly understand that scenario. What I was referring to are the people that are Clearly living beyond their means and bragging about their trip next week to Hawaii while their signing. Then they are right back where they started with credit cards,...etc. In no way would I fault anyone for the reasons that they are forced to use that equity. But people need to be very cautious was really the point I was making. Your home is not an endless source money. Especially if your income is a way to low to match the bills. So please don't think we're being judgemental in any way. Not picking on Anyone , just an observation.

Reply by JS_MD on 11/2/06 1:33pm
Msg #156885

Re: Jason and SueW

Of course I am not refering to people with medical issues etc..... I am talking about people who think they can live a $100,000 a year lifestyle while making $30,000. I dont feel sorry for them when they get in a jam. They need to do the math......you cant spend more than you make. I just got back from one where the luxury cars in the driveway were worth more than the house ,which was a filthy mess........cars were clean though. LOL.

Reply by Jason on 11/2/06 4:16pm
Msg #156934

Medical surprises are why I hate to see PPPs

Imagine having a major med surprise. You need to hit your equity for exp not covered by ins.

Then you get hit with a PPP fine of $14K to refi.

I've seen it happen. Makes me sick ea time.

Reply by Stephanie Santiago on 11/2/06 5:21pm
Msg #156942

Re: Don't be so quick to judge--Very Tragic n/m

Reply by Traveling2U on 11/2/06 1:39pm
Msg #156886

Re: The Re-Fi Game.. Post I watch Suze Orman

she added this topic "Can I afford it" Oh my you wouldn't believe what they want

sometimes her call in makes me feel like I'm watching smack down screaming what are you/you two thinking.

People first, then money, then things by Suze many do it in reverse

Reply by MelissaCT on 11/2/06 5:34pm
Msg #156948

Forgot about college, medical, lay-offs -- many more reasons n/m

Reply by PAW on 11/2/06 7:21pm
Msg #156959

Re: The Re-Fi Game.. When will it end?

According to ABN AMRO, the average life of a mortgage today is less than 5 years. That means, the loan must either be paid off or refinanced. Chances are, it's refinanced, for a multitude of reasons. Not only bill consolidation, but there are still lots of loans in the 8% and higher bracket (due to many different reasons) and can be refi'd with a lower interest rate, especially if there is no cash out. Some lenders will do a streamline refi to a lower rate, with no closing costs to the borrower. It's like having an ARM with a declining rate guarantee. (Now wouldn't that be nice. )