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There are more people wrapped up in the option-ARM game than just the first-time homebuyers who bought near the end of the housing boom (2004 or later). A couple of weeks ago, I got a lot of help from readers with the story I was working on about exotic financing.
Will you help me again?
I’ve been catching little bits and pieces (and long pieces) in other blogs and news sources about these mortgages since then. There’s a category of ARM-borrowers who’d bought their homes before 2002 using traditional mortgages, paid them mostly off, and then decided to use a cash-out refinancing mortgage to tap into some of the equity they’d built (sometimes more than 200 or 300 percent of their original purchase price).
It was unprecedented, to put a bunch of money into your house and then – voila! – be able to use that money again for traveling, college funds, home renovations, new cars, business investments – you name it.
I don’t want to twist your arm, but if that’s you, I’d love to hear from you. Or, if you thought about refinancing with an ARM, and decided to play it conservative, I’d be interested in your perspective, too. Click on my name below to send me an e-mail.