[wtc911]

Not being able to refinance that 78k would be due to credit or employment issues only,

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Can uou accurately predict the interst rate fifteen years out? I can't. I do remember the Carter years though.

[RockinRight]

Even at 12 or 13% at worst their payment might go up a hundred bucks, IF they took it back to 30 years.

Point being, the risk of a balloon is mild compared to the types of loans out there now.