Reply #9: It's the subprime market that will cause the biggest problem. [View All]

[Gormy Cuss]

Too many desperate or gullible people bought the sleazy sales pitches of subprime lenders. A 20K penalty for refinancing is a red flag. It's a shame because they will be the ones losing the most when they walk away. Real estate investors will just shrug, take a tax write off and move on.

on edit:

I second Bosshog's advice. Save something every month, even if it's just a dollar. It's also usually better to sit on a slightly above market fixed rate loan than refinance every year because of closing costs. As for HELOCs, when we refi'ed last year they offered us a line that was so big I asked the banker if he was kidding. No wonder people think they can afford to do lavish remodels and buy new cars using the line of credit.