Something is missing from that story. I dont know what it is, but that cant be the whole story. My guess is that there is alot of other debt in there that isnt disclosed. They only disclose the assets side of the balance sheet, what about the debts side? (morgages on those rentals, cc, auto loans…) If they owe alot of money already, it is a risky loan even if they have a house that isnt underwater.

Plus, they can almost pay off the stupid thing with savings. Why do two people in their 60’s want to extend their payments into their 90’s? To save a few bucks on the interest rate reduction? They’ll pay alot more long term than any interest rate reduction will give them. (I am assuming that this ‘savy’ person got a rate back in 2003, or so an isnt carrying something from the 80’s or worse)