Cash out refinance. Even when rates are at 8% at the end of 2023 when the market was the slowest, 31% of transactions were refinances thanks to all-time credit card debts.
Cash Out Refinances
Reasons why people refi even when rates are high
- pay off credit card debts
- pay off medical debts
- pay off student loan debt (there’s a special program for this).
- restructure from 15 year to 30 year to lower the payment
- purchase a investment property and second home
- pay for private school tuition or college tuition
- home improvements and renovations
- add square footage – maybe parent moved in with you, kids growing up, new baby
- aging in place retro fit
- disaster
- happened and insurance didn’t cover all the costs
Target Market for Recession-Proof Buyers
- Doctors – grads go from making $40k to $400k overnight.
- First-timer buyers – college grads, newly weds, growing families (i.e. babies)
- Relo Employees – job is making you move
- Investors – people that flip homes for a living always need to buy and sell
- Aging population – downsize (think reverse mortgages)
- Divorce – the spouse that keeps the property can do an owelty refi to pay off the vacating spouse
- Estates – multiple people inherit a property and one person wants to payoff the siblings