The Succasunna Serial Refinancer

The owners of today's featured house owned their property for 21 years. Owning their property during the Great Housing Bubble but they when the property sells they will be lucky if they break even. How can that be? Through the wonderful tools of HELOC's and cash-out refinancing of course. Today we feature the story of the Succasunna, New Jersey serial refinancer.

Here is the home info

Property Description

This gorgeous, expanded center hall colonial is perfect. Hardwood floors throughout, new kitchen, central air, fireplace, large deck, gas log fireplace, rec room with bar, much, much more. A one year Home Protection Plan is also included. All this on over .5 acre level grounds in a great Succasunna location. Close to major highways and shopping malls.

Here is a look at the finances -

• The house was purchased in April 1987 for $245,000.

• There were eight mortgages throughout the 80's and 90's not available on the database.

• An equity line was opened in Sept. 2000 for $50,000 with First Union National Bank - the line was closed Dec. 2006.

• Another mortgage was taken in Dec. 2001 for $275,000 with First Union Mortgage Corp.

• A HELOC was opened for $100,000 in Feb 2003 with Wachovia Bank.

• The buyer refinanced in May 2004 for a new mortgage of $400,000 with Wachovia Bank.

• In June 2006 another HELOC was opened this time again for $100,000 with Wachovia Bank.

• The house is currently for sale at $539,900.
  

If the seller is lucky enough to get their full asking price they will walk away with $507,506 which is more than twice the purchase price. This would be a profit of $262,506 plus all of the equity that had built up over the 21 years. However with the constant refinances with obvious cash-outs and the HELOC lines the owners will be lucky now to walk away with $7,506 with the assumption that they closed one of the two HELOCs from Wachovia. If they did not the lenders stand to lose $92,494 on this property. This is a house that if there was no refinancing would be almost paid off, but that is not how it will be.

Also notice that the owners took had 13 mortgages over a 21 year period - which is one approximately every 19 months. The brokers must have liked this owner. The owners listed the kitchen as the upgrade - and while the cabinets look high end the counters do not look that fancy. The tastes are also a bit outdated - most new buyers would not want the dining room so heavily wall-papered. To most young buyers the house will need alot of updates to feel contemporary.