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refinancing for "responsible homeowners."


Entry #1,821


JAP69Comment by JAP69 - May 13, 2012, 8:03 am
I reckon I would possibly do the same as these homeowners to refinance and pay off higher interest debt.
But the drawback on that is they or I may create new higher interest loans if a bind for cash occurs after refinancing. Then their is may be no chance to refinance again on the home. Debt is a vicious cycle once caught in it.
Or they could take the chance on going behind on mortgage payments and have some of the principal forgiven like which recently occured in the recent article posted on home principal forgiveness.
sully16Comment by sully16 - May 13, 2012, 9:42 am
What gets me, so many are refinancing and paying the points for a lower percentage rate, then you still have the typical closing costs, if your not going more than 2 points, I really don;t see where it can be worth it, if you have the points rolled into the mortgage, if you don't have the cash.
we paid off a 30 year mortgage in 24 years, I paid an extra 120.00 each month, and when we got down to the last couple thousand I just paid it off, we really didn't save a ton of interest, because we were down to principle, but I freed us of that extra bill each month a little quicker. The downside is we don't have anything to itemize and we got creamed in taxes.
My advice to new home buyers, make sure you have al least 6 house payments in the bank in case of illness or job loss, if you buy a house and you have no cash left after you close, you could be setting yourself up for hardship.

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