Welcome to Mortgage Guide
Mortgage Home Article
. For a permanent link to this article, or to bookmark it for further reading, click here.
Reasons To Mortgage Refinance
from: Mortage & Debt FactsThere are different reasons to seek a mortgage refinance. You can use a mortgage refinance to cash out equity in your home. This can keep you staying in your home while making needed home improvements. Or, you can use the money for other things like to pay off college expenses for your kids. Most people looking to mortgage refinance these days are doing it because they are stuck in an adjustable rate mortgage where the interest rate has reset or is set to reset. Some of these borrowers will find that they can refinance their mortgage and others will that either their situation, the local real estate market, or prepayment penalties will block this avenue. However, mortgage brokers are still trying to get people qualified, so it doesn’t hurt to try.
Lower Interest Rates
Another key reason people attempt to mortgage refinance is to lower their interest rates. Even with fixed interest rate loans, if the new rates available are at least one point less than the old one, it can be a good reason to look into refinancing. You do have to pay closing costs, which can add up to thousands, however if you intend to stay in your home a shift in your interest rate can easily make up for the closing costs, especially if the spread is wider between the old and new rate.
The uncertainty of Adjustable Rate Mortgages (ARMs) is also important when seeking a lower rate. If you refinance from a fixed to an ARM, the interest rate will eventually climb back up. However, if you have an ARM and find a lower rate on a fixed rate mortgage, this can be one way of locking into a much more attractive interest rate for the long term.
Modifying Terms
Lastly, the mortgage refinance can be a way to modify the terms of the agreement to opt for longer or shorter mortgage terms. Longer terms usually increase the amount you pay in your mortgage refinance but lower your monthly payments. Shorter terms typically increase your monthly payments but build up equity much faster and settle the loan quicker.
You can refinance a loan so that you are financing the home to take some of the equity out as cash. So, if you have 50% equity and want to take money out while modifying the terms of your loan, you can opt for a 40-year loan with only 20% down. That will give you 30% in equity to pay off closing costs and use the rest of the money for whatever else you want.
Mortgage Home Specific links
Mortgage Home News
One in three mortgage holders still underwater - msnbc.com (blog)
 ABC Action News | One in three mortgage holders still underwater msnbc.com (blog) Nearly 16 million homeowners owed more on their mortgages than their home was worth in the first quarter, or nearly one-third of US homeowners with mortgages. That's a $1.2 trillion hole in the collective home equity of American households. Negative equity remains a drag on housing market More than 30% of mortgage borrowers still underwater Most Underwater Homeowners Still Paying Mortgages |
Freddie Mac: 30-year mortgage rate down a tick at 3.78% - Los Angeles Times
 WRAL.com | Freddie Mac: 30-year mortgage rate down a tick at 3.78% Los Angeles Times Sales of new homes were rising in a recent survey, with the low rates helping to make housing more affordable. But many homeowners are trapped in homes worth less than their mortgages, restraining home resales and holding back the recovery in the ... US 30-Year Mortgage Rate Falls to Record 3.78 Pct. 30-year mortgage rate hits another record low |
Expensive housing? Mortgages as affordable as they were 20 years ago - Globe and Mail
 Globe and Mail | Expensive housing? Mortgages as affordable as they were 20 years ago Globe and Mail If you had to earn a living predicting home prices and could use just one indicator to do it, which would you choose? I asked two top economists that question. Their answer was the same: housing affordability. “Affordability is a key variable. |
US sales of new homes rose 3.3 percent in April - Houston Chronicle
 Boston Globe | US sales of new homes rose 3.3 percent in April Houston Chronicle A pickup in hiring and cheaper mortgages, combined with lower home prices in most markets, has made home buying more attractive. Builder confidence has increased steadily since the fall. On Tuesday, the National Association of Realtors said sales of ... Add a personal message:(80 character limit) |
Should States Be Chided for How They Use Their Mortgage Settlement Money? - U.S. News & World Report (blog)
 Mortgage Rates & Trends (blog) | Should States Be Chided for How They Use Their Mortgage Settlement Money? U.S. News & World Report (blog) The "other part" consists of about $20 billion in direct aid to homeowners, which includes mortgage principal reductions and payments to homeowners who lost their homes to foreclosure. According to Miller, the $2.5 billion or so the states have to play ... Foreclosure-prevention efforts bog down Lawmakers Gave Millions from Mortgage Settlement to Local Governments STATE USES NATL' MORTGAGE SETTLEMENT MONEY TO PLUG BUDGET Attorney General ... |