Should I Refinance my Adjustable Rate Mortgage Now or Wait for the Interest Rates to Drop?
February 3rd, 2010With interest rates on the rise, many people are wondering if they should refinance their adjustable rate mortgages (ARMs), especially since about one in four mortgages will have their interest rates reset in 2006 or 2007. This means your interest rate is adjusting, and probably sooner than you think, especially if you’re holding 2/28 or 3/27 hybrid ARM. You know your payment is increasing, maybe to as much as $300 per month, as the rates continue to rise. So, now the question is whether to refinance into an interest only mortgage, another ARM or go with a fixed rate mortgage. If you’re only planning to stay a few more years, you may want to consider an interest only mortgage or another ARM that offers a longer fixed period before the interest-rising adjustable period.
The introductory rate may be higher than for your old loan–an average of about 6.09% for a 1-year ARM and 6.59% for a 5-year ARM, up from about 5.2% this time last year, but probably a lot less than what you will be paying when your interest rate adjusts. If you plan on staying for a long time, you may want to get a 30 year fixed or 40 year fixed mortgage rate loan. The average cost for a 30-year fixed-rate loan rose to 6.93% in Interest.com latest survey, and Federal Reserve Bank raised the rate it charges banks to borrow money another quarter-point last week. 40 year fixed rate mortgages will probably run you anywhere to one quarter to one half of a percentage point higher. You will pay more for other fixed-rate loans as well, according to Interest.com, the national survey of lenders: 15-year loans climbed to 6.57% after holding in the 6.3% range for the past month, up from 5.23% one year ago. 30-year jumbo loans (for more than $417,000) rose to 7.11%, up from 5.89% this time last year.
If you plan on getting a fixed rate loan, you should act quickly because mortgage rates are predicted to push past 7% over the next few weeks. Do you have an adjustable mortgage rate home equity loan or home equity line of credit (HELOC)? If so, you may want to consider mortgage refinancing into a fixed rate second mortgage loan because introductory rates for ARMs, are rising even faster than those of fixed mortgage rate loans. Act quickly before rates rise again.
Maria Ny is a respected free-lance writer from San Diego, California. She has written many articles that covered a broad range of subjects ranging from Bankruptcy Reform, Credit Repair to Subordinate Financing. Check out her informative articles online at BD Nationwide Mortgage Refinance Loans. Learn more about bad credit refinance requirements and get additional information including a free mortgage quote for debt consolidation loans. We suggest you get more information and learn more about the guidelines for a Bad Credit Second Mortgage that could save you money by reducing your monthly payments.
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Refinance Your Mortgage at a Lower Interest Rate – Should I Refinance My Mortgage?
January 28th, 2010
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If you are looking to refinance your mortgage interest rate then now is probably a good time. The financial crisis has left many people struggling and defaulting on their loans, which have left banks more open to refinancing at a favorable rate to you if you have good credit. The question then becomes whether you should refinance or not.
While having a lower interest rate can save you money in the long run in the short term there will be closing costs that you must cover. The average closing costs on a $200,000 loan is $3,118. To this figure you will also have to factor in other costs such as fees, taxes, insurance, and association dues. So you’ll need to calculate the amount of money that you are saving and how long it will take to recoup these costs.
So for example if you are saving $100 in interest expenses it will take you 31 months before you begin saving money. In general refinancing to a lower interest rate only makes sense if you plan on being in your current house for another 4 years or more. If however you plan on moving and selling your home then you would be better off on keeping your current loan.
Another reason that you might be interested in refinancing is that you want to consolidate debt or extend your payment from 25 to 30 years, thus lowering your monthly mortgage costs. In these cases refinancing can make sense. You just need to weigh the over all costs and benefits.
One way to keep abreast of the current mortgage interest rates is through the BankRate.com and Mortgageloan.com websites. They keep track of current mortgage and housing trends and provide you with the latest news in their free newsletters.
Finally you will want to get a copy of your credit report before applying before trying to refinance your mortgage at a lower interest rate. You can do this at FreeCreditReport.com once a year.
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How To Refinance With Missed Payments
January 21st, 2010Today there are many home owners who are feverishly struggling to pay their mortgage payment on time. Many of these troubled homeowners started out with low rate adjustable rate mortgages that became unaffordable once their initial interest rate reset to much higher levels. In most cases as the payments began to rise the missed payments started to occur. Although when you are in this situation it seems that there are no options available to you. The fact is even with todays tighter mortgage lending guidelines you can refinance your adjustable rate mortgage with late payments on your payment record.
The biggest program that allows you to refinance your home loan when you have one or more mortgage late payments is the FHA Secure Initiative. The FHA Secure Initiative was introduced by the Bush administration and its main goal was to help home owners refinance who could not afford their adjustable mortgage (ARM) payments. Under this new federal plan you should be able to qualify for loan approval as long your payments were on time before your rate adjusted and the rest of your credit is fairly in tact. The FHA Secure will lend up to 97.75% of your homes appraised value. For borrowers who are trying to refinance and have credit that will not allow FHA to refinance them they need to look at other options.
Even though they have received alot of negative attention on the news lately sub prime mortgage loans can still help people with less then perfect credit when trying to refinance with missed payments and save their homes. The only drawback to a subprime loan is the lack of lenders that are still in existence so it may take you quite a few calls to local mortgage companies to find one that can help you. The most important thing to remember about sub prime financing is that you should always stay with a fixed rate to avoid the same problem you are now facing with your adjustable rate mortgage.
When you realize your mortgage is no longer affordable The most desperate option would be to sell your home and buy something more affordable with more stable financing. Although no one wants to sell their home it maybe the best option for many people that have waited to long and cannot get a refinance loan. Selling your home will at the very least help you maintain good credit and keep a foreclosure off your credit report.
Although it is very stressful to realize your mortgage is no longer affordable the most important thing is to take action at the very onset of any problems. By attacking the problem early you increase your chances to secure the refinance loan you need to save your home.
Darin Sewell is a Wisconsin Mortgage Broker who has put together a huge mortgage and real estate database that can help you learn more about Refinancing With Less Then Perfect Credit and many other topics. You can check it out at http://www.mkemortgage.net/content/sitemap.htm
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How To Qualify For Lower Home Mortgage Refinance Rate
January 14th, 2010
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Refinancing offers a wide range of benefits, but the only way to enjoy all these advantages is to qualify for a low home mortgage refinance rate. It is true that you can secure a fixed mortgage by refinancing a home, but if you are paying a higher interest, it will substantially increase your monthly bills. On the other hand, a low rate will save you hundreds of dollars every month. Following are some of the tips that you may find very handy while you are negotiating with your lending company to lower the interest rates.
Your Existing Lending Company
When it comes to refinancing, your existing lender is perhaps your best hope. In order to negotiate a better refinance deal with them, it is very important for you to establish a good payment record with them. When you apply for refinancing, the first thing that the lenders do is that they review your payment record and credit history. If you have not made any default in your existing mortgage and your credit score is also healthy enough, there is no reason why the lending company should not consider your application for a lower home mortgage refinance rate. Always remember that defaulters are considered as risky applicants. In such cases, your application will either be denied or accepted with a high rate offer. The higher rate in refinancing kills the basic objective. Your objective is to save money by opting for refinancing, but the higher rates may not allow you to save a single penny. Instead, you may even end up paying an overall higher amount over the course of the loan. Therefore, if you plan to opt for refinancing at a later stage, you must make all your payments in time. Reducing the unnecessary debts will also maximize your chances of approval for a lower home mortgage refinance rate.
Comparison – Shopping
Keeping in view the large number of lenders available in the market, it always pays to do a thorough comparison-shopping. You are recommended not to go for the first offer no matter how lucrative it sounds. It is always better to get free quotes from some of the short listed lending companies. Comparing the different offers will help you make an informed decision, and you will be able to choose the best deal. Comparison-shopping will also give you the power to choose the loan package with the lowest refinancing rate.
Last, but not the least, getting the lowest home mortgage refinance rate is all about taking the right step at the right time.
There are several ways to qualify for a low home mortgage refinance rate. For example, you have a better chance with your existing mortgage, but only if you have made the repayment in a timely manner for your current mortgage. You can read more information on home loan mortgage refinance, by visiting mortgage refinance loan.
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