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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.
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Mortgage Loan News
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 By E. Scott Reckard Record low interest rates for 30-year mortgages edged down another tick, Freddie Mac said in its latest survey, which showed lenders across the nation offering the benchmark loan at 3.78% compared to 3.79% last week. US 30-Year Mortgage Rate Falls to Record 3.78 Pct. |
Winthrop Realty Trust Acquires Matured Mortgage Loan - MarketWatch (press release)
Winthrop Realty Trust Acquires Matured Mortgage Loan MarketWatch (press release) BOSTON, May 23, 2012 (GlobeNewswire via COMTEX) -- Winthrop Realty Trust (NYSE:FUR) announced today that it has acquired a first mortgage loan secured by a 326000 square foot commercial building located in Ft. Lauderdale, Florida containing ... |
Court: Families cannot sue over loan discount fee By The Associated Press ... - Laramie Boomerang
 KLEW | Court: Families cannot sue over loan discount fee By The Associated Press ... Laramie Boomerang The Supreme Court ruled unanimously Thursday that three families cannot sue a mortgage company for allegedly charging them a loan discount fee without giving them a lower interest rate. The high court's decision tosses out lawsuits filed in 2008 ... Mortgage Closing Overcharge Suits Curbed by High Court Supreme Court says families cannot sue mortgage company over loan discount fee US top court limits reach of 1974 real estate law |
Negative equity remains a drag on housing market - Los Angeles Times
 Los Angeles Times | Negative equity remains a drag on housing market Los Angeles Times Nearly 1 in 3 homeowners with a mortgage in LA County owes more than the property is worth, new data show. These underwater loans hinder mobility and hurt prices because they tend to stymie the important move-up market. More than 60% of loans are ... One in three mortgage holders still underwater Despite Home Value Gains, Underwater Homeowners Owe $1.2 Trillion More than ... Negative Equity More Widespread Than Previously Thought, Report Says |
BofA May Turn Profit on Mortgage Buybacks, Credit Suisse Says - Bloomberg
 Bloomberg | BofA May Turn Profit on Mortgage Buybacks, Credit Suisse Says Bloomberg (BAC) to repurchase $330 million of mortgages from its securities may result in a profit for the lender while triggering investor losses, according to Credit Suisse Group AG. The bank broke Freddie Mac rules by using computer programs instead of ... |