“Why are there still 6%-7%-8% Mortgages Around?"

I always have a knee jerk reaction when someone calls me about a refinance and I hear rates of 6-7-8% and ask, why did you wait so long to refinance?

Jon called me telling me that he had been referred by one of his co-workers. He had been complaining to his co-worker for weeks about his not being able to complete his refinance that he started in September. When I hear stuff like this, it tells me this is a mortgage that is not going to close.

Jon took out a 1st and 2nd mortgage in 2004, got 100% financing to purchase their home. The first mortgage is at a 7.75% rate and the second mortgage is 8.99%. Here is the stupidity, his credit scores are in the low 700’s and his wife is a 566. She has co-signed a car loan for her son and he had recently defaulted on the loan.

His income is sufficient to do the mortgage on his own, but since she is on title the application was done in both names. I immediately asked if there was any reason to have the mortgage in both names and he said that his wife had a problem being deeded off the property. I told Jon, let’s not deed her off, but do the mortgage only in his name. He asked me if this was legal!

His loan is such an easy mortgage to get accomplished, but could never have been done with his wife on the mortgage. It always amazes me, how so many in my business operate with blinders on.