How did David Parkes and Kathy Sakry's mortgage double? With each refinancing, they took out cash to spend and pay bills, and rolled high closing costs, fees and property taxes into their mortgage.
Original mortgage, May 1997: $54,500
Terms: 30-year fixed-rate mortgage at 6.75 percent
Closing costs: $2,346
Principal and interest payment: $389
Refinance, November 2004: $64,231
Terms: 30-year adjustable-rate mortgage at 6.38 percent for the first two years
Closing costs: $3,990 including a $1,682 origination fee
Cash back: $10,505
Principal and interest payment: $401
Refinance, December 2005: $85,200
Terms: 30-year "pick-a-payment" negative amortizing adjustable-rate mortgage that started at 6.51 percent
Closing costs: Approximately $4,000, including a $2,054 yield-spread premium and an unusually high $700 title insurance payment
Cash back: $12,036
Interest-only payment: $332
Refinance, October 2007: $112,000
Interest rate: 30-year fixed-rate mortgage at 7.625
Closing costs: $7,502
Cash back: $5,903
Principal and interest payment: $793
Jim Buchta
