Lindy, No... its debt, not income. You don't get to "keep it"... you have to pay it back (but you do get to deduct the mortgage interest, most likely.) NOW... keep those credit cards zero-balanced from here ;~) Cheers, Dave Donhoff Leverage Planner

"Does anybody know why banks don't do this, other than income from the extra fees? " Some lenders actually do what you are suggesting. They never used to, but many people have been getting unsolicited offers for zero cost refinancing with their current lenders. And of course, that is about the money too. Since lots of people refinance before paying off the loan, some lenders have found it makes more sense to lower the rate than to lose the business completely. Of course, most lenders sell off the loans they make, so they don't care if you pay off early etc. They make all their money off of the up-front fees, not the 30 years of interest.

Hi Shaun, Why can't the existing mtg company send the money we've paid in for our property taxes to the new mtg company and then *they* can pay them when they are due? I just dont understand this. Can someone explain it to me? I can explain... but unfortunately, the answer's not going to be very satisfying. The reason is beacuse the servicing company (the place you send your loan payments to, who manages the distribution of the cash, and subsequent bookkeeping of where it all goes, and when) is not your mortgage company. It may be a subsidiary of them, or a 3rd party contractor... but its not the actual mortgage company (even if it has a very similar name.) The servicing companies business model is to have as many loans managed per month, by the least number of clerical administrative staff, at the lowest possible hourly rate. In order to accomplish this, their processes are *EXTREMELY* dumbed-down and stretched out. *NOTHING* happens quickly on any out-of-the-ordinary request, and all standard changes (like the turnover of escrowed funds for taxes & insurance when a refinance occurs) is handled in a batched-out manner once a month during a special shift. In short; It COULD be done the way you logically just described... but the rate/fee driven public doesn't want to pay the higher servicing costs for that kind of service. Hope that clarifies (if not exactly creating the warm & fuzzies.) Cheers, Dave Donhoff Leverage Planner

Hi Tishtoshnm, Any idea on how the bailout will affect banks and their refinancing. Will it make it harder to get a traditional refinance, raise rates for everybody not on the incentive program? From the inside, I can resolutely confirm; We're all clueless... The government is teasing & feigning at taking steps beyond common commercial logic, and has already made several "dead on arrival" hail-mary bailout attempts that have created all kinds of perverse unintended consequences. We can ONLY be sure, at this point, that for the most part the government & regulators are COMPLETELY clueless of what consequences & results any further bailout efforts will actually create. We don't know what the government is going to do, Whatever they do, we are unsure what the consequences will be, Whatever they do, it is obvious THEY are unsure what the consequences will be. If you wait... you may be rewarded. If you wait... you may be punished. We are at the complete whim of politicians who are used to doing whatever it takes to earn votes from an irrational public, and have little-to-zero experience in the on-the-street real world of finance. ADD TO THAT, the current administration was brought into power by people who are generally not business leaders or economic entrepreneurs... people who feel disconnected from direct economic creation & production, and blame "Wall Street" for their current malaise. We're at sea, in a storm, with ripped sails and no rudder... Buckle up! Dave Donhoff Leverage Planner