Refinancing a Better Solution by webmaster

Refinancing a Better Solution

When you are looking at getting some extra money on the existing mortgage for whatever purpose, there are two options you can consider: Taking out a second mortgage or Refinancing your existing mortgage. Refinancing is often stated as one of the most beneficial ways to save money on your home mortgage.

How Refinancing Is Helpful?

There are many things that play a role to decide if refinancing is a good idea. The first thing is to determine what your overall goal is by refinancing. It can answer many questions for you including providing you with these benefits. Why do you want to refinance?

•Do you want to save money on your loan in total?

•Do you want to cut down your terms so that you are paying off your loan sooner?

•Do you just want a lower interest rate or a different type of loan?

•Do you want to borrow more money and still have just one loan?

Is refinancing beneficial than a second mortgage? Yes, because

1. Second mortgages have a higher interest rate; this can be three times higher than your original mortgage. So don't take out a second mortgage, instead just refinance your existing one!

2. Refinancing your existing loan is much better to keep some equity in your home. Not many loan companies will refinance your home back up to 100% of the value without making you take out a second mortgage. You certainly don't want to sell your entire house back to the bank; if you do that you have no safety margin.

3. Sales people like to sell you second mortgages because they get a lot of commission from doing so. Don't believe everything they say, it's likely that they will say anything to get the most commission possible!

Save to spend

Homeowners who refinance will benefit by lowering their monthly payments. A mortgage rate reduction of 1 percentage point can reduce a principal and interest payment by about $62 for every $100,000 financed.

Savings of $62 may not seem like much, but it will ease the burden of living in a recessionary economy. Many of those homeowners will also receive another $60 monthly benefit from the Obama Administration's Making Work Pay tax credit. The extra cash will benefit retailers if consumer spending picks up as a result.

About the Author

webmaster www.flmortgagedepo.com

Buying a Home without a Social Security Number - ITIN Loans by Lisa Zapalac

No Social Security Number? You can finance a home with your ITIN If you don't have a Social Security Number, but you do have an ITIN (Individual Taxpayer Identification Number), you may qualify for an ACORN program that offers 30-year fixed-rate financing with a very competitive interest rate. You can also use alternative lines of credit, such as rent and utilities, to qualify.

An ITIN loan, for homebuyers who may be new to this country, who do not have a Social Security number, gets its name from "Individual Tax Identification Number."

Adriana Vasquez, a housing counselor for ACORN, said her organization works with CitiBank and other lenders to make ITIN loans available for first-time homebuyers who do not have Social Security identification.

"For those seeking an ITIN loan, the first step is to attend one of our first-time homebuyer seminars - which are offered in Spanish, English and Vietnamese," Vasquez said. "These are held on Saturdays, last four hours and provide information about buying a home for the first time buyers. During the seminar, Realtors and loan officers explain the steps to home buying and how to qualify for a home mortgage loan."

After first-time homebuyers attend the four-hour seminar, their second step is to schedule a one-on-one meeting with an ACORN housing counselor.

"During this meeting, we go over their credit, their finances and determine what they can afford," Vasquez said. "If we find financial or credit problems, we show them how to solve these problems, and we tell them about their rights when working with Realtors and loan officers."

When they come to ACORN for their one-on-one meeting, first-time homebuyers must bring two year's worth of tax returns as well as a good credit history and a stable job history.

"If they don't have a credit history, we use alternative credit," Vasquez explained. "One of their most important payment histories is their 24-month rental history, and we help them get letters from their landlords to verify their payment record," she said. "We also use their utility bills to show they have a good payment history."

The paperwork the ACORN counselor will want to see for ITIN loan applicants includes the following:

# Two year's tax returns, a W-2 or, if self-employed, the equivalent of a two-year work history. # Three most recent bank statements # One month of most current paycheck stubs # A 24-month rental history plus three alternative credit references for 12-months each. These must be verifiable, such as utilities, and they can be used in place of a traditional credit report.

"Once the homebuyer meets with the ACORN counselor and is pre-approved for an ITIN loan, the next step is to work with a loan officer," said Brian Ellis, area manager with CitiMortgage. "Because the homebuyer is pre-approved by ACORN, their loan will automatically be a 30-year, fixed-rate mortgage loan with no PMI."

PMI, or Private Mortgage Insurance, is usually required when financing a home with less than 20 percent down. Not having PMI can save the borrower as much as $18,000 over the life of a 30-year loan, Ellis explained.

CitiMortgage, as well as several other lenders, works with pre-approved ACORN clients through a national agreement with ACORN. "Because of our agreement, we can get applicants the best interest rates available for ITIN loans. Currently, those rates range from 6 to 6.5 percent, which is excellent anywhere in the market," Ellis pointed out.

Once the client has been pre-approved through ACORN's program, has met with a loan officer and is approved for the loan, they only need a minimum of $500 out-of-pocket for the transaction.

This fee covers any costs of the bank's origination of the loan as well as a full appraisal of the property the client wants to purchase.

Said Ellis, "The ITIN loan program is for the purchase or refinance of a property. It is not to buy second homes or investment properties," Ellis said. "If you own a property and want to buy another property through the ACORN program, you must sell your existing property first."

Vasquez said that ACORN also does refinancing. "We can help clients who have become involved with high-interest loans and who need relief. We're here to help anyone who wants to become a homeowner," she said.

For more information, or to get started, call ACORN's Houston office at 713-863-9002.

Are you considering a second home or relocating to the United States?

About the Author

Lisa Zapalac Vice President, Co-Founder Public Relations Community/Realtor Affairs 281-692-1400

Find out more about Texas Housing Market. Know your market as your begin to look for homes in Texas.

English-Spanish Real Estate Dictionary by Lisa Zapalac

Even if your builder or Realtor is speaking English, it might sound like they're talking in another language when they start using terms that are unfamiliar to you. Don't worry - this list of commonly used terms will help clear up any confusion.

Adjustable-Rate Mortgage (ARM): Also known as a variable-rate loan, an ARM usually offers a lower initial rate than a fixed-rate loan. The interest rate can change at a specified time, known as an adjustment period, based on a published index that tracks changes in the current finance market. Indexes used for ARMs include the LIBOR index and the Treasury index. ARMs also have caps or a maximum and minimum that the interest rate can change at each adjustment period.

Adjustment Period: The time between interest rate adjustments for an ARM. There is usually an initial adjustment period, beginning from the start date of the loan and varying from 1 to 10 years. After the first adjustment period, adjustment periods are usually 12 months, which means that the interest rate can change every year.

Amortization: Paying off a loan over the period of time and at the interest rate specified in a loan document. The amortization of a loan includes the payment of interest and a part of the amount borrowed in each mortgage payment.

Amortization Schedule: Provided by mortgage lenders, the schedule shows how over the term of your mortgage the principal portion of the mortgage payment increases and the interest portion of the mortgage payment decreases.

Annual Percentage Rate (APR): How much a loan costs annually. The APR includes the interest rate, points, broker fees and certain other credit charges a borrower is required to pay.

Application Fee: The fee that a mortgage lender charges to apply for a mortgage to cover processing costs.

Appraisal: A professional analysis used to estimate the value of the property. This includes examples of sales of similar properties.

Appraiser: A professional who conducts an analysis of the property, including examples of sales of similar properties in order to develop an estimate of the value of the property. The analysis is called an "appraisal."

Appreciation: An increase in the market value of a home due to changing market conditions and/or home improvements.

Arbitration: A process where disputes are settled by referring them to a fair and neutral third party (arbitrator). The disputing parties agree in advance to agree with the decision of the arbitrator. There is a hearing where both parties have an opportunity to be heard, after which the arbitrator makes a decision.

Asbestos: A toxic material that was once used in housing insulation and fireproofing. Because some forms of asbestos have been linked to certain lung diseases, it is no longer used in new homes. However, some older homes may still have asbestos in these materials.

Assets: Everything of value an individual owns.

Assumption: A homebuyer's agreement to take on the primary responsibility for paying an existing mortgage from a home seller.

Balloon Mortgage: A mortgage with monthly payments based on a 30-year amortization schedule, with the unpaid balance due in a lump sum payment at the end of a specific period of time (usually 5 or 7 years). The mortgage contains an option to "reset" the interest rate to the current market rate and to extend the due date if certain conditions are met.

Bankruptcy: Legally declared unable to pay your debts. Bankruptcy can severely impact your credit and your ability to borrow money.

Capacity: Your ability to make your mortgage payments on time. This depends on your income and income stability (job history and security), your assets and savings, and the amount of your income each month that is left over after you've paid for your housing costs, debts and other obligations.

Closing (Closing Date): The completion of the real estate transaction between buyer and seller. The buyer signs the mortgage documents and the closing costs are paid. Also known as the settlement date.

Closing Agent: A person who coordinates closing-related activities, such as recording the closing documents and disbursing funds.

Closing Costs: The costs to complete the real estate transaction. These costs are in addition to the price of the home and are paid at closing. They include points, taxes, title insurance, financing costs, items that must be prepaid or escrowed and other costs. Ask your lender for a complete list of closing cost items.

Collateral: Property which is used as security for a debt. In the case of a mortgage, the collateral would be the house and property.

Commitment Letter: A letter from your lender stating the amount of the mortgage, the number of years to repay the mortgage (the term), the interest rate, the loan origination fee, the annual percentage rate and the monthly charges.

Concession: Something given up or agreed to in negotiating the sale of the house. For example, the sellers may agree to help pay for closing costs.

Condominium: A unit in a multiunit building. The owner of a condominium unit owns the unit itself and has the right, along with other owners, to use the common areas but does not own the common elements such as the exterior walls, floors and ceilings or the structural systems outside of the unit; these are owned by the condominium association. There are usually condominium association fees for building maintenance, property upkeep, taxes and insurance on the common areas and reserves for improvements.

Contingency: A plan for something that may occur but is not likely. For example, your offer may be contingent on the home passing a home inspection. It the home does not pass inspection, you're protected.

Counter-offer: An offer made in response to a previous offer. For example, after the buyer presents their first offer, the seller may make a counter-offer with a slightly higher sale price.

Credit: The ability of a person to borrow money, or buy good by paying over time. Credit is extended based on a lender's good opinion of the person's financial situation and reliability.

Credit Bureau: A company that gathers information on consumers who use credit. These companies sell that information to credit lenders in the form of a credit report.

Good-Faith Estimate: A written statement from the lender itemizing the approximate costs and fees for the mortgage.

Gross Monthly Income: The income you earn in a month before taxes and other deductions. It may also include rental income, self-employed income, income from alimony, child support, public assistance payments, and retirement benefits.

Home Inspection: A professional inspection of a home to determine the condition of the property. The inspection should include an evaluation of the plumbing, heating and cooling systems, roof, wiring, foundation and pest infestation.

Homeowner's Insurance: A policy that protects you and the lender from fire or flood, which damages the structure of the house; a liability, such as an injury to a visitor to your home; or damage to your personal property, such as your furniture, clothes or appliances

Housing Expense Ratio: The percentage of your gross monthly income that goes toward paying for your housing expenses.

HUD-1 Settlement Statement: A final listing of the costs of the mortgage transaction. It provides the sales price and down payment, as well as the total settlement costs required from the buyer and seller.

Index: The published index of interest rates used to calculate the interest rate for an ARM. The index is usually an average of the interest rates on a particular type of security such as the LIBOR.

Individual Retirement Account (IRA): A tax-deferred plan that can help you build a retirement nest egg.

Inflation: An increase in prices.

Inquiry: A request for a copy of your credit report. An inquiry occurs every time you fill out a credit application and/or request more credit. Too many inquiries on a credit report can hurt your credit score.

Interest: The cost you pay to borrow money. It is the payment you make to a lender for the money it has loaned to you. Interest is usually expressed as a percentage of the amount borrowed.

Keogh Funds: A tax-deferred retirement-savings plan for small business owners or self-employed individuals who have earned income from their trade or business. Contributions to the Keogh plan are tax-deductible.

Liabilities: Your debts and other financial obligations.

Lien: A claim or charge on property for payment of a debt. With a mortgage, the lender has the right to take the title to your property if you don't make the mortgage payments.

Loan Origination Fees: Fees paid to your mortgage lender for processing the mortgage application. This fee is usually in the form of points. One point equals 1% of the mortgage amount.

Lock-In Rate: A written agreement guaranteeing a specific mortgage interest rate for a certain amount of time.

Low-Down-Payment Feature: A feature of some mortgages, usually fixed-rate mortgages, that helps you buy a home with as little as a 3% down payment.

Margin: A percentage added to the index for an ARM to establish the interest rate on each adjustment date.

Market Value: The current value of your home based on what purchaser would pay. An appraisal is sometimes used to determine market value.

Mortgage: A loan using your home as collateral. In some states the term mortgage is also used to describe the document you sign [to grant the lender a lien on your home]. It may also be used to indicate the amount of money you borrow, with interest, to purchase your house. The amount of your mortgage is usually the purchase price of the home minus your down payment.

Mortgage Broker: An independent finance professional who specializes in bringing together borrowers and lenders to complete real estate mortgages.

Mortgage Insurance (MI or PMI): Insurance needed for mortgages with low down payments (usually less than 20% of the price of the home).

Mortgage Lender: The lender providing funds for a mortgage. Lenders also manage the credit and financial information review, the property and the loan application process through closing.

Mortgage Rate: The cost or the interest rate you pay to borrow the money to buy your house.

Mutual Funds: A fund that pools the money of its investors to buy a variety of securities.

Net Monthly Income: Your take-home pay after taxes. It is the amount of money that you actually receive in your paycheck.

Offer: A formal bid from the homebuyer to the home seller to purchase a home.

Open House: When the seller's real estate agent opens the seller's house to the public. You don't need a real estate agent to attend an open house.

Points: 1% of the amount of the mortgage loan. For example, if a loan is made for $50,000, one point equals $500.

Pre-Approval Letter: A letter from a mortgage lender indicating that you qualify for a mortgage of a specific amount. It also shows a home seller that you're a serious buyer.

Predatory Lending: Abusive lending practices that include making mortgage loans to people who do not have the income to repay them or repeatedly refinancing loans, charging high points and fees each time and "packing" credit insurance onto a loan.

Pre-Qualification Letter: A letter from a mortgage lender that states that you're pre-qualified to buy a home, but does not commit the lender to a particular mortgage amount.

Principal: The amount of money borrowed to buy your house or the amount of the loan that has not yet been repaid to the lender. This does not include the interest you will pay to borrow that money. The principal balance (sometimes called the outstanding or unpaid principal balance) is the amount owed on the loan minus the amount you've repaid.

Radon: A toxic gas found in the soil beneath a house that can contribute to cancer and other illnesses.

Rate Cap: The limit on the amount an interest rate on an ARM can increase or decrease during an adjustment period.

Ratified Sales Contract: A contract that shows both you and the seller of the house have agreed to your offer. This offer may include sales contingencies, such as obtaining a mortgage of a certain type and rate, getting an acceptable inspection, making repairs, closing by a certain date, etc.

Real Estate Professional: An individual who provides services in buying and selling homes. The real estate professional is paid a percentage of the home sale price by the seller. Unless you've specifically contracted with a buyer's agent, the real estate professional represents the interest of the seller. Real estate professionals may be able to refer you to local lenders or mortgage brokers, but are generally not involved in the lending process.

Refinance: Getting a new mortgage with all or some portion of the proceeds used to pay off the original mortgage.

Replacement Cost: The cost to replace damaged personal property without a deduction for depreciation.

Securities: A financial form that shows the holder owns a share or shares of a company (stock) or has loaned money to a company or government organization (bond).

Title: The right to, and the ownership of, property. A title or deed is sometimes used as proof of ownership of land.

Title Insurance: Insurance that protects lenders and homeowners against legal problems with the title.

Truth-In-Lending Act (TILA): Federal law that requires disclosure of a truth-in-lending statement for consumer loans. The statement includes a summary of the total cost of credit, such as the APR and other specifics of the loan.

Underwriting: The process a lender uses to determine loan approval. It involves evaluating the property and the borrower's credit and ability to pay the mortgage.

Uniform Residential Loan Application: A standard mortgage application your lender will ask you to complete. The form requests your income, assets, liabilities, and a description of the property you plan to buy, among other things.

Warranties: Written guarantees of the quality of a product and the promise to repair or replace defective parts free of charge.

Information provided by Freddie Mac.

We hope this English-Spanish real estate dictionary has been helpful! To know more such terms,use the "Ask Us" feature to e-mail us your question.

About the Author

Lisa Zapalac Vice President, Co-Founder Public Relations Community/Realtor Affairs 281-692-1400

Find out more about Texas Housing Market. Know your market as your begin to look for homes in Texas.

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit by Pascal Parvex

Bad Credit? With Poor Credit You Can Still Refinance Or Get A Home Equity Line Of Credit

Have you decided to refinance your home or apply for a home equity line of credit but worry about your credit rating? Even with poor credit it is possible to refinance your existing mortgage or obtain a home equity line of credit. New practices in the lending industry have made it easier than ever for you to refinance your mortgage or get a home equity line of credit. If you have adverse credit, specialized lenders can help you find the loan package your need with an interest rate you can afford.

Refinancing your home loan can allow you to make improvements to your home or consolidate debts. Some lenders offer loans up to 125% of your home's value even if you have less than perfect credit. Your current mortgage terms and interest rate, the length of time you intend to stay in your home, and the level of debt your currently have are all factors to be considered in making the decision to refinance your mortgage. If you have equity in your home, you will often receive a lower interest rate than those with little or no equity.

Home equity lines of credit are revolving accounts with your home serving as security for the loan. When you get a home equity line of credit you are approved for a certain amount of credit. The maximum amount you can borrow at a given time will depend on your credit limit. Typically, a home equity line of credit will have a variable rate of interest although some lenders may offer a fixed rate as well. You will have an amount you can borrow at any given time and you may not borrow more until a certain amount is repaid. Often you will have specific times as to when you may borrow money from your available credit limit.

Obtaining a home equity line of credit is can be the perfect solution for people with remodeling goals, children to put through college, or the need for access to extra cash in the event of an emergency or unexpected financial situation. You can use the money for any purpose and gain peace of mind in knowing you are prepared for whatever life brings you.

Refinancing your mortgage or getting a home equity line of credit has been the answer for millions of people looking to realize their financial goals. Even if your have bad credit there are loans and lenders who specialize in helping finance people with poor credit. They can help you reach your individual objectives.

To view our list of recommended bad credit or sub-prime mortgage lenders, visit this page: Recommended Bad Credit Mortgage Lenders.

About the Author

Pascal is the owner of Allmediaserver, A webpage, where you find hundreds of tips about the topics finance, travel, car, computer and shopping.

VA Home Loan Refinance - What Determines Your VA Home Loan Interest Rates by Rick Lee

To give you a background on VA home loan refinance, it started in 1944 with the Servicement´s Readjustment Act. This is also known as the GI Bill of Rights. The GI Bill was signed by President Franklin D. Roosevelt which provided war veterans with guaranteed homes without down payment. This was specifically designed to give veterans housing and assist their families. This is the dream of most veterans - to have their very own homes.

The VA Home Loan Refinance guarantees that the loans are made by private lenders like mortgage companies, banks, and savings and loans corporations. The guarantee requires the lender to protect the client just in case he fails to repay the loans.

At least with the VA Home Loan Refinancing, one can guarantee the protection of both parties. This is received from the required down payment that has been agreed on - in both favorable financing agreements.

Making the most out of a VA Home Loan Refinance deal is a good idea because it allows you to know more about the loan program that you are getting yourself into. You will also realize that there is less red tape as you make the transaction to your new lender.

You have to remember that all payments you make now with your VA home loan refinance is under the new lender. In doing so, you get to save more money because of the low interest rate and the low monthly payment. Just make sure that the lender you entrust your VA home loan refinance has good credit score.

The use for the VA home loan refinance has been proven quite effective when it comes to the percentages of the guarantee rates. The interest rates really depend on how you were able to meet the requirements for the VA home loan.

For one, you need to have good credit rating. If you do, then you pay lower interest rates compared to someone who has negative credit rating.

Another factor that determines the rates you have to pay on your VA home loan refinance is the state you´re living in. The percentage of what your new lender has to pay depending on the amount you have left on your mortgage vary from one state to the next. Sometimes the standard rates do not apply in a specific state. You have to make sure that the rates you agree on are considered liable in the state that you are in.

The whole point of you going for VA home loan refinance is to save more. Don´t go with the first tempting offer that comes your way. Consider your other options. Check which one you will be able to save more and then go with that.

About the Author

Discover more about how to apply for VA home loan refinance at my site. Learn more about the VA loan requirements.

Roth on Roids for IRA: Retirement Plan Investing: CPA or Lawyer Viewpoint by Rocco Beatrice

With a Roth IRA on Roids, you could contribute $5,000, $20,000, $50,000 and $100,000 depending on how much money you have and how much you want to contribute and when you want to begin to withdraw your money.

It is powerful wealth building tool. When I heard about this from Roccy DeFrancesco, I was completely overwhelmed because I spent my lifetime looking for tax-advantaged products that are safe, legal, that you can use, with very little risk. You are not going to get this from your lawyer or your accountant. Your lawyer's stock-in-trade answer is "possibly, maybe or I'll look into it." And even if he knows he's not going to tell you because, traditionally, he works on both sides of the fence.

Your accountant and lawyer would typically not look to at any type of these products because he could become an IRS target. Whenever there is a criminal investigation, his papers would be the first thing they go after, summonses. I work with accountants and I teach them and this is their usual stance on the matter. I teach lawyers and accountants for credits. They're generally intimidated. For the price of preparing your income tax return, they're not going to look at these types of wealth-building tools. The wealth-building strategies of a Roth IRA on Roids are completely legal. You do not have to hide your money. You do not have to go offshore. You do not have to provide a lot of documentation, and you do not have to report your requirements to the feds.

With a Roth IRA on Roids the following basic information would be required: your age; how much money you wish to deposit into your account; when you wish to withdraw from the account. Based on this information, a specific financial chart can be drawn for you.

To summarize the main benefits of your Roth IRA on Roids: your money never goes backwards; you'll be able to take your money out tax free; there is a guaranteed return. So let's discuss how you can fund your account using other people's money.

Roccy DeFrancesco's wrote a book, "Home Equity Management." The book is very well written. Roccy is a very meticulous guy and I have a lot of respect for him. The book describes how you can reposition your home equity. Let us look at your home equity for a moment. If you are in your home with a 95% mortgage, does your mortgage diminish the value's home? The answer is, "No." If your home is fully mortgaged it would not diminish the value. But, if you live in an area like California, with mud slides, or Florida with hurricanes and tornadoes and you own 100% of your home (i.e. not mortgaged) then whose problem would it be if your house slides down the hill or it goes under water? It would be your problem. On the other hand, if it's heavily mortgaged, then it would not be your problem. It would be an insurance problem and it would be a mortgage company problem.

So what is the relation of your home equity with your Roth IRA on Roids? If you leverage your home equity and reposition it to fund your Roth IRA on Roids then, effectively, your money is sitting in your Roth IRA on Roids account and in investment opportunities and it's safe. Real estate is the only leverageable asset class. Everybody understands that you buy real estate with 5% down, 10% down, depending on how well financed you are. It's the only leverage that is recommended, people accept, people understand, the banks do it. So by repositioning your home equity in order for you to fund the Roth IRA on Roids, financially you are using other people's money. And this could also be accomplished with commercial real estate. If you have equity in commercial real estate, refinancing it in order for you to reposition your assets definitely makes a lot of sense. At the end of the day, you still have the same assets. If you have equity in your home or commercial estate, that's an asset. If you have equity in Roth on Roids, or other investment opportunities, together they are the same number. You're just repositioning. You are relocating your assets. That's all you've done.

About the Author

Best IRA Rescue.com offers the Roth on ROIDS as one of the best IRA tax-savings strategies with benefits of a guaranteed death benefit and principal, tax-free growth and distributions. Call us toll-free: 888-93ULTRA (888-938-5872) today! Best IRA Rescue Other article:What's Better 401k or Roth IRA

Seattle Mortgage Reel Estate Weekly Kick off June 1 2009 by Seattle Mortgage Reel

To View the short video: 

http://www.youtube.com/watch?v=1TIqwPqIXlQ&fmt=22

Welcome to the Weekly KickOff!

We've switched gears from the Weekly Recap to empower homeowners with news that may impact their largest investment, their home. 

What is happening to interest rates? What is causing this sudden increase?

Last Wednesday the 5 year bond were auctioned flooding the market with no buyers on the market. Keep in mind the major purchaser of Bonds and most importantly Mortgage Back Securities has been the Federal Reserve. With a increase in Bonds available, Wall Street saw a major sell off and a move to Treasuries. With this sudden exodus yields spiked making mortgage rates to increase. Yes in just one day we say the rates of 4.75% disappear and move to the highs of the day closing at 5.50%. 

There was a pull back with some investors thinking that it was oversold, possibly it was. Opening the week more concerns were raised about U.S. equities when China began to publicly question if the United States will be able to repay its debt. China being a major investor in U.S. Equities and could cause rates to hold at higher levels. Should countries around the world begin to believe that we will not be able to honor our debt rate can move even higher. Some of the major financial institutions have now began to speak about rates below 5.00% may be coming to an end. 

The economy recovering? We have all heard media forecast the current recession ending by the close of summer or the beginning of the 4th quarter. Great news! China has also commented that production is beginning to return as orders for manufacturing is coming in from all countries, here another sign that the global recession may be coming to an end. Great news! All being good news economically but to home owners this could mean that rates would be higher in 2010..... Timing has always been our stand point. 

Lets break down some key points why timing is key! 

$8,000.00 First time home buyers tax credit, which may be available at closing soon Interest rates below 5.00% 

Housing at their lowest levels in almost 10 years 

Buying power stretched to negotiate closing costs, points, buy down points and escrow reserves 

FHA financing for 3.5% down on homes 

105% home affordable loan to refinance 

Refinancing and Buying with historical low rates 

Now lets look at what happens when interest rates spike!

For every $10,000 and interest rates increasing 1% monthly payments increase $6.11 

For a $300,000 and interest rates increasing 1% monthly payments increase by $183.31 

What can you use $183.31 today, to pay for other expenses ?

Timing is key, waiting to long in the end can cost you more, this is why we emphasize so much to work with a mortgage professional who understands the market and is proactive in the financing process. 

Stay tuned for more to come! 

As licensed loan originators in the State of Washington we would like to assist current and future homeowners. 

Thanks!

The Mortgage Reel 

http://www.seattlemortgagereel.com

About the Author

Assisting current and future homeowners to achieve the American Dream of Homeownership.

Creating a fundamental foundation on the responsibilities of homeownership to a financially manageable position.