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Take Advantage of Cheap Refinance Mortgage Rates

A small consolation of the mortgage crisis are the depressed refinance mortgage rates that are now available. These historically low rates make refinancing a very lucrative option for a lot of people, for extra money to spend or to save. But before you make a move take advantage of cheap refinance mortgage rates, you have to make sure to do the math and make sure that you don’t end up spending a lot when trying to close a refinancing deal. Here are some tips

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Mortgage Refinancing Market is Booming

There is now a new era of “historically low” when it comes to mortgage rates and there is nothing like it.

Four years ago when we were all celebrating the arrival of already “historically low” mortgage rates. Back then, they were dancing at around 5.5% for a 30 year fixed mortgage which was truly significant back then because in the preceeding thirty years before that, 30 year fixed mortgages never posted a rate lower than 6.5% and actually climbed to 16+% at one point during the early 90’s.

But now, rates have reached a new low. Thanks to movements by the feds, rates could now hit 4.75% depending on your creditworthiness. That is almost one percent lower than the previous historic lows of half a decade ago. Last month, the national average rate was just a little over 5 percent.

People are aware of this opportunity now and refinancing activities have jumped up by over sixty percent in December, according to the Mortgage Banker’s Association, although these activities only count refinancing applications which may or may not become actual mortgages.

As a rule of thumb, refinancing makes sence if the new rate is about 1% lower than the old mortgage. At this rate it makes more sense any less and the upfront fees make refinancing expensive.

If you are looking to save some extra cash, it might be a good idea to look into refinancing your existing home mortgage. Granted, it may not be for everyone.

5 Reasons to Refinance

1 – Lower Monthly Payments

Interest rates are low, you’re already halfway through your existing mortgage and your monthly costs are up and you could really could use the cash. By taking advantage of lower than low interest rates and extending your 25 year home mortgage that has only 15 years remaining on it back for another 25 years, you lower your monthly payments and you get more cash in your pocket at the end of each month. Keep in mind though, that you are still in debt and that you are now going to be paying that loan for a much longer period of time.

2 – Bigger Savings

With lower interest rates and less fees these days, refinancing could save you thousands in the long run. You can also try to take advantage of the bonuses for earlier repayments. These things combined could amount to several thousand dollars in cumulated savings.

3 – Get Cash. Now.

By refinancing that mortgage in a way that gives you some cash to use, like switching to a Home Equity or Line of Credit loan, you get the opportunity to add some value to your home, or even get that car you urgently need. But remember, this is not cash you own, but cash you owe so spend it wisely.

4 – Debt Consolidation

Taking out a new loan can let you pay off your existing mortgage as well as your existing credit card debt and replace it for a loan that may take longer to pay but has a far lower interest rate than that credit card bill you have been struggling to pay off.

5 – Early Mortgage Repayment

Let’s say you just had that rare salary increase and you think you would like to put that mortgage out of your mind earlier in life. Refinancing your existing mortgage sounds like a good idea. You can take out a new loan with shorter terms, say 10 years instead of 25, and you can end up owning your house sooner than later. Less things to worry about later in life.

Taking out a new loan for your existing home mortgage might sound tedious or scary but by just getting the facts straight and throwing in a little careful math, you can make refinancing work for you.

Save your Home, Save your Home Mortgage

Folks with many people right now just struggling to make payments on their home mortgage, there has to be some ways to help them out right? But how did they get into this predicament in the first place? Maybe it was that adjustable rate mortgage (ARM) that looked so enticing because the first few payments were really affordable. However, with home mortgage rates up, many homeowners are finding it difficult to make the payment. Another possible reason is that they may have been fooled into taking on a home loan they can’t afford to pay or maybe they were forced into refinancing with higher rates and interest rates because of bad credit. The reasons are plenty. These people who can’t pay now can’t even take advantage of low refinancing rates or even of the TARP that might help them. They could lose their home, and with it their savings. Their home mortgage is in trouble and what can they do?

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Mortgage Brokers – Who Regulates Them?

At some point in time, you tend to ask yourself, who is in charge of protecting me from possibly bad mortgage business practices?

The Federal Trade Commission is the main government body that regulates the business of mortgage brokering. The FTC is tasked to enforce the basic consumer protection statute (found in Section 5(a) of the FTC act) that states that “unfair or deceptive acts or practices in or affecting commerce … are … declared unlawful.” So in this case, your rights as a consumer are protected by the FTC and in turn, they watch over the business of mortgages.

States are also regulators for mortgage brokers. They issue licenses to brokers to allow them to run their businesses in their locality. In this sense, a lot of people who work on loans that pertain to mortgages and call themselves mortgage brokers really are not legally allowed to do so.

Further information about the regulators of the mortgage industry can be found on these websites:

www.CSBS.org
www.AARMR.org
www.namb.org
www.nabmb.org

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Read the news carefully today. You never know what you're gonna get. For recommended reading materials on mortgages and refinance aspects and how to fix your deeds or just plain news on real estate, check out the new york times online. It's a very good source of information.