[quote=HLS]Had another caller today who was in a rush to pay off their house, saddled with a 15 YR mortgage and a bunch of equity that they cannot get to.
They are in financial trouble, but don’t qualify for a loan today. Lost their job. About 6 years into a 15 YR mortgage.
Their January payments will be at least 30 days late, mortgage and credit cards. Their credit score will drop 50 to 100 points once the lates hit, and then they will have no chance of refinancing for a long time.
They never thought they would be in this situation… selling the home may be their only way out, for whatever they can get.
The way I see it, a 30 YR mortgage and the difference in the bank would have spared them from this situation…. The difference in payments would mean over $150,000 in the bank after the last 5 years.
Bad luck or bad planning ??
[/quote]
True that if they had been in a 30 year and saved the difference they would be in a better position. BUT if they had enough money to pay off the house in 15 instead of 30, what the hell are they doing with credit card balances? I know nothing about these people, maybe they are differnt than your usual American over the past decade or so. IMO Most likely the difference would not have been saved but rather spent on stuff they didnt need. No one thinks they are gonna get laid off when times are good, why not enjoy it? Life is short…..
WHere was their 6 month cushion? Assuming they are above the average income/house/lifestyle wise, seems like they should have been able to bring some CASH to the table if they really were financially smart, but unlucky. It seems like they are gonna learn a very hard financial lesson. I hope the best for them.
