Anyone getting a cash out refinance so you will have money before the economic recession? (home loan, fixed rate)

[questioner2]

I know some people who are really nervous about the upcoming recession. They work in an industry that has many layoffs during economic downturns. They are planning to refinance their home loans before the economy really crashes next year and they are thrown out of work.

If they can get money out in a cash out refinance then they will be able to survive until the economy comes back sometime near 2010. Do you think this is a good idea?

[choobie]

Originally Posted by questioner2

I know some people who are really nervous about the upcoming recession. They work in an industry that has many layoffs during economic downturns. They are planning to refinance their home loans before the economy really crashes next year and they are thrown out of work.

If they can get money out in a cash out refinance then they will be able to survive until the economy comes back sometime near 2010. Do you think this is a good idea?

I would only suggest doing this if the following applies:

You're not planning to move anytime in the near or mid term future (5+ years)
You can get a great fixed rate
You save smartly

The last point cannot be emphasized enough.

What I would do is to deposit the funds in a safe foreign account in a alternative currency expecting a depreciating dollar. Perhaps short-term government bonds to places like Australia, Switzerland, or another stable sovereignty. Not only would you earn a decent return, you'll piggyback off of what is expected to be a debased dollar.

If you must invest in US based assets, companies which are multinational and also concentrate on exports (e.g. Altria since the tobacco export market). Exports usually benefit from a debased currency.

[westchester]

how do they expect to pay off loan if they have no job..........i would think if you new you would have no job you would wan.t less debt..........?????

[galore]

umm. How will HIGHER monthly payments be a good idea, if you anticipate a job-loss? What do you do after the lump-sum is (quickly) spent paying the mortgage during the out-of-job period?

[anrn]

We're thinking about cash-out refinancing. Ages 55 & 59; have 1 yr. cash for expenses on hand. Only owe $30K @ 6.375%. House valued @ 180K. Can get refi @ 4.25,% so we'll improve our rate (save) on the balance we owe on, anyway. We both have stable, recession-proof jobs, so no concern there. We plan on carefully investing the difference, either in CD's or some of it in stocks. Either way, I think we'll beat the market. Anything we're NOT thinking of???

[chet everett]

Answered in thread that has been started for the topic asked by anrn