Re: refinancing mortgages to reduce payments
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well lets not call it a refinance then. cant we just call it a complex financing option? i want to go to a bank and tell them that i want them to finance a 30 year loan for me. i want them to extend my mortgage every year to 30 years and reduce the price of payments at a locked in interest rate.
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If by "locked in" interest rate you mean the same fixed rate as when you first took out the loan, then you are asking the investor to take more than 30 years of fixed interest rate risk. I.e. if they are giving you the optiono of doing this every year, after ten years you effectively have a 40 year loan.
They are going to want a higher interest rate to compensate for this risk (i.e. just like a 40 year loan rates are higher than a 30 year which are higher rate than 20 year which are higher than 15). Since the loan you've described could easily be a 80 year loan, that interest rate premium might be pretty costly.
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