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Refinancing Offers
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Within mere minutes of buying my house last year (alright, that’s a bit of an exaggeration), the mortgage loan companies jumped on the opportunity to offer refinance, home equity lines of credit, and other “tempting” offers to restructure the first and second mortgages I just agreed to. What surprises me is that those offers work often enough that the mortgage companies would be willing to send out the offers in the first place (companies aren’t stupid, if it doesn’t work, they stop doing it). In all fairness, some of them were offers for an adjustable-rate mortgage which meant a ridiculous low rate but if I really wanted an ARM, I would’ve signed up for one in the first place. I have your vanilla 30-year fixed mortgage with a competitive interest rate and I just paid all the mortgage-related closing costs… what would lead them to believe I’d be at all interested in paying those fees again and refinancing???
Have you ever heard of someone refinancing so soon after buying a house? Would it even make any sense?
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I did
Perhaps, and this is just a guess, if one was to take an interest only loan in hopes of flipping the home within 30 days and they failed to do so, they would immediately refinance with under a deferred cost basis to avoid making a payment, and try to slide the deferred closing costs off to the eventual buyer of the home. Just a guess.
Hey Frank, want to share your reasoning?
Poor Boy, that’s a good point and considering the percentage of purchases the past few years that were for the purposes of flipping, that’s probably not that far off of a reason.
My situation was unique in that I was graduating from college and wasn’t going to start working right away. In order to get a mortgage so that we could move in before I started working, my wife and I took out an IO 7/1 ARM with no documentation. Basically as risky as you can get (almost). We made one payment on the IO and by then I started working, so we refinanced to a conventional 5/1 ARM. We don’t plan on living in the house for 5 years, so I’m not too worried about rates going up and having the ARM reset higher.
We were in a somewhat similar situation with our mortgage as franky — when we moved to Austin, Andrew was contracting — they had promised to convert him to a fulltime employee right before we would arrive, but of course that ended up taking several extra months past their original promised date. So the loan that we could get as a contractor was a pretty good no doc, but it was not great. As it turns out, within two months, he was converted to full time *and* the interest rate had dropped, so we ran the numbers and realized that it would take less than 24 months to recoup costs if we refinanced, so we did. We had only made two payments at that point, but what the heck.
We got the refi invitations, but we also got heaps of mortgage insurance offers, all in just my spouse’s name because his name comes first on the title.
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I got lots of refinancing offers after I refinanced recently. I guess they thought I enjoyed the process so much that I wanted to do it again!
in a bad situation, financially, due to my low credit score, unable to refinance house,to pay off car, and get some cash. any suggestions, would be appreciated.thnks.