I just wonder why someone would repeatedly refi just to shave .125% or .25% off their current interest rate (especially if they didn’t need to take any cash out) and then shortly thereafter retire the loan! I mean, what’s the point? How much did they really save on their mortgage over their entire period of ownership . . . especially if their mortgage was continually or even on some occasions reset back to 30 or 15 years upon successful refi?[/quote]
It’s actually a BRILLIANT strategy to refi about 6 months before paying off a loan with a high balance….
6 months is a reasonable amount of time to say my life changed, I’ve decided to pay off my loan. (Nobody is going to ask)
Credits are always a % of the loan amount, there are more dollars available (and easier to get no cost) with a higher balance.
On a $200K loan, you could get anywhere from $1000 to $4000 and a 400K loan double that.
Pay $40 a month more for 6 months, get a few thousand dollars! That’s the point…. Very few people do it OR even understand they can do it.
Does that make it a loophole?.
I’m not clear on why you keep bringing up reset of a mortgage when you stated that you know payments
can be adjusted. Reset is only one option of a refi.
Those who understand adjust their payments accordingly.
the MINUMIUM payment ALWAYS resets a loan. Adjusting payments will change the term.
