Over the past couple of days, a new possible excuse for the recession has been coming up here and there and it’s called the mark-to-market accounting rule, and not a lot of people know what it is. I had to look it up myself, and I’ll try my best to explain what it’s about.

Continue reading Mark-to-Market and Mortgages

Basically, when you talk about a jumbo mortgage, this is essentially a mortgage with a larger amount than the normal limits set by industry standards. These standards are defined by our mortgage giants Freddie Mac and Fannie Mae.

Continue reading What is a Jumbo Mortgage?

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

Continue reading Take Advantage of Cheap Refinance Mortgage Rates

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.

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.