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After the refi. they would still have over $45,000 in equity. If a really hard core emergency came up a HELOC could make their mortgage payments for many months. (I think given their credit history they'd rather take a HELOC then default on unsecured debt anyway.)

Oh, my husband and I also drive cars that are over ten years old and my family doesn't consider a car broken in until it reaches 100,000 miles, but I do know financially responsible people who choose a different path for lots of different (many valid) reasons.