Refinancing Mortgage to reduce equitygreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
I am planning on refinancing my home mortage in order to pull as much money out of my equity in the form of cash. This should reduce my exposure to a potentially large loss if there is a depression-induced drop in real estate values. If the bank forcloses on the house, then I could imagine negotiating with them to rent the house from them; I'd guess most banks wouldn't want to kick people out of there homes. What do you all think of this plan?
-- Bob Watson (firstname.lastname@example.org), June 24, 1998
Just don't shoot yourself in the foot and spend the money, in case things don't turn out terrible.
At some point in time bankers might stop lending because of Y2K jitters.
You know, people talk about us bringing on doom and destruction by setting off banking runs, but the flip side of this is that banks might cause the same doom and destruction by limiting loans.
If you believe them they're trying to assure themselves that their big borrowers are Y2K compliant now.
-- Rocky Knolls (email@example.com), June 24, 1998.
If you plan to reinvest, maybe you can find a foreclosure, and pay cash. If you are foreclosed on your present home, move into your paid off free and clear house. Homestead the property! I don't think they can take away from you anything that's paid for (consult a real estate attorney). We purchased a foreclosure and it was a sweet deal. There are deals out there. Maybe you won't want to stay in your present house, maybe there will be something better for less money!
Also, if you are foreclosed on, the mortgage company wants you out of there! They are not in the rental business. However, you can renegotiate a new mortgage at a lower price. If the US dollar is devalued, that means your house is too! It's hard to think ahead as to what could possibly happen. But I would rather be forclosed on with cash in my pocket than none at all! The equity belongs to you not the mortgage company!
-- Barb-Douglas (firstname.lastname@example.org), June 25, 1998.