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Home Refinance Article
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Homeownership can be a real pleasure and something we all look forward to at one (or sometimes more) time in our life. For most of us, however, homeownership also means a mortgage. With the high cost of real estate and houses in general, very few people can purchase a home without taking out a mortgage loan. When we take out our mortgage loan, we take it out with the intention of making payments for a certain number and then owning our home free and clear. Unfortunately, many homeowners have to refinance home loans for one reason or another.
from:Although there are many reasons why people chose to refinance home loans, the main reason is for better interest rates on their current home loan. Home mortgage loans are set up as one of two ways: either A.R.M. or adjustable rate mortgage or a fixed rate mortgage. Most refinance of home loans are as a result of an adjustable rate mortgage that has increased its interest rates. When you take out an A.R.M. mortgage the interest rates and terms are amortized over a certain number of years, for example 20 years. However, the payments are ballooned over a shorter term, like 36 months. If the interest rate you charged when you take out the loan is 8%, you will be charge 8% for the entire 36 months.
At the end of the 36 months, the loan is up for renewal. If the interest rates have increased on the market, your interest rate on your loan will also increase for the next 36 months, or balloon period. However, if the current market rates have decreased, your new loan interest rate will decrease as well. It's almost like a crap shoot. When mortgages are up for renewal is when you see most people requesting to refinance home loans.
Refinance of home loan mortgages are sometimes done to turn an adjustable rate mortgage into a fixed mortgage. Occasionally, the market interest rate will take a large drop. Unfortunately, this doesn't happen often, but when it does many homeowners refinance home mortgage loans to take advantage of the new lower interest rate. Unlike an A.R.M. loan, with a fixed mortgage, your interest rate is locked in for the entire term of the loan, usually 20 years or sometimes longer. Sometimes when the interest rates go down, they don't stay down for long, but if you've just had your loan renewed to a fixed interest rate loan, the banks cannot increase the interest rate. Occasionally, the interest rates may go down even lower, causing people to refinance home loans again to be guaranteed the newer interest rate.
Refinancing is a common practice today with the interest rate fluctuating as they are and economy being so shaky. So make your payments on time to maintain a good credit rating so you'll always be eligible to refinance your home loan.
Home Refinance News
Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance - MarketWatch (press release)
 The Mortgage Reports | Realtors(R) Offer Support for Bill to Help Responsible Homeowners Refinance MarketWatch (press release) J. "As the leading advocate for homeownership, Realtors(R) knows that helping consumers remain in their homes must be a priority if we are going to move the housing market and our nation from a fragile recovery to long-term prosperity," said Veissi, ... Freddie Mac: 30-year mortgage rate down a tick at 3.78% 30-year mortgage rate hits another record low Freddie Mac Repurchase Policy Is MBS Investors' Latest Worry |
Northen Virginia Refinancing Expert Explains New Home Affordable Refinance Program - SBWire (press release)
Northen Virginia Refinancing Expert Explains New Home Affordable Refinance Program SBWire (press release) Northern Virginia Refinancing Expert Laura DiCarlo explains all about the revamped government program that provides refinancing options to homeowners who owe more on their mortgage than their house it worth called HARP 2.0. Don't HARP on it, refinance program too good to pass up Mortgage Q&A: Borrowers hit by mess others made |
Real: FHA streamline refinance gets cheaper - The Republic
Real: FHA streamline refinance gets cheaper The Republic ... In the streamline program, the FHA asks for limited documentation from borrowers and doesn't require an appraisal of the home. The no-appraisal rule allows owners to refinance even if they owe more on their mortgages than their houses are worth. |
Housing recovery underway as home prices, sales show strong gains - WFMJ
Housing recovery underway as home prices, sales show strong gains WFMJ More >> A lot of homeowners with underwater mortgages would like to refinance, but they don't qualify for HARP (the federal Home Affordable Refinance Program). Do they have other options?More >> What kind of credit score do you need to qualify for a ... |
Real estate industry pushes Senate on refi bill - MarketWatch
Real estate industry pushes Senate on refi bill MarketWatch The bill would go further than the existing Home Affordable Refinance Program. Now in its second stage, HARP is “not designed to help enough underwater homeowners who are eligible and deserve assistance,” said Bill Emerson, CEO of Quicken Loans, ... |