[Slick61]

... getting back to the "why"... I know that a few years ago when I bought in, the sub-primes were a way to get into MORE house than would normally be affordable. I think most were expecting (or were told) to ride the appreciation wave for a year or two, then do a re-fi with their now superior loan to value ratio. That was before the bottom fell out of the market.

I did two re-fi's in the first year. I found it amusing when they asked how much cash-out I wanted. NONE!, was my emphatic answer. I wanted to build as much equity as possible.

I tried to make sure that I didn't get too carried away, price-wise. I hate my house, but at least I can afford it... even with a fixed rate. Relocating from central Florida to Southern California was a bitter pill to swallow, housing-wise. My mortgage tripled (too bad my salary didn't)... and that was for a smaller, older home that needs tons of updating.

My strategy is to go the interest-only route for a few more years. Now, I'm not out spending that money that would've gone towards the principal... I'm investing it for a little bit of return. With my current mortgage, I don't see the point of paying down the principal right now... so I'll continue to get the maximum tax advantage in the meantime. When my note starts to adjust (fixed for 5 years), I'll either re-fi into a fixed rate or just let the rate adjust. Either way, I'll dump some cash in to keep the payment within my comfort level (if I'm still in this house). Right or wrong... it's a plan.

But yea, the teaser rates are everywhere. I get 2 or 3 offers a day, wanting to re-fi my house. Most all are of the negative amortization type... which scare me. I guess a lot of people are more tolerant of risk than I. I see so many people living WELL beyond their means. That "live for today, don't worry about tomorrow" mentality is quite popular in Southern California. I just don't embrace it. I was out of work for 10 months before I got this job, & luckily I was able to ride it out because I maintained some "rainy day funds"... and it rained for quite a while! Luckily, I emerged with my 812 credit score in tact.

anyways... of my soapbox. It's just that I can see why people would go for the sub-primes... (as long as the market is skyrocketing)