mortgages and refiances

Timing the refinancing of your second mortgage is just as important as finding low rates and fees. Before you decide to refinance, make sure that you have a clear benefit. Either save money with lower rates or protect yourself with the security of a low fixed rate second mortgage.

When Lower Rates Equal Savings

Lower rates can equal savings if you have enough time to recoup any closing costs or other fees. In most instances, a point drop of two percent or more with seven years left on the loan makes it cost efficient to refinance. To see if this is true in your case, compare what you are paying now with the potential payment of a new mortgage. In this case you are looking for an adjustable rate mortgage to take advantage of the decrease in interest rate cuts by the fed. Combining both your first and second mortgages will further reduce your rates and save on application fees. The ultimate goal being when interest rates have dropped to refinance into a fix mortgage and lock in a great rate. The business cyle of interest rates is the end all.

Protect Yourself From Rising Rates

With an adjustable rate second mortgage, refinancing can protect you from rising interest rates. Even with caps in place, you could see your current loan period length, adding to your total loan costs. Refinancing for a fixed rate home equity loan will provide you with the security of a regular payment schedule. In some cases, you may also find a lower fixed rate than your current adjustable rate.

Timing Is Important With Refinancing

With most home equity loans, you pay most of the interest at the beginning of the payment period. So by the last half of your loan, you are paying hardly any interest. To see the biggest savings, you need to refinance early. If you plan to move soon, then you will also want to hold off on refinancing. While closing costs usually only equal 1% to 3% of principal, it takes a couple of years to regain these costs. To see if you have a clear benefit to refinancing, start looking at loan quotes. Figure the potential costs of interest and fees, and compare them to your current second mortgage. Factor in your future financial goals, and you will have a good idea if refinancing is for you. Remember refinance can be your friend.

Until next time.

home equity line of credit

A home equity line of credit is one of the most useful tools that a homeowner can have in his or her financial arsenal. A line of credit is a financial tool that is always there, allowing a homeowner to borrow money when needed for such emergencies as job loss or illness. It also comes in handy for financing any one of a number of things, with home improvement probably topping the list of most common uses. Unlike a traditional home equity loan, which has a repayment schedule consisting of a fixed amount of money to be paid on a set schedule, the line of credit is quite flexible. Once approved, the borrower decides when, or if, to borrow the money and how much to borrow. The payment schedule is more flexible, too, working more like a credit card bill than a mortgage payment.



The downside of a line of credit when compared to a home equity loan is the adjustable interest rate. With a line of credit, the rate can vary over time and it can rise and fall with the vicissitudes of the financial market. If a borrower happens to have a large balance on his or her account and market interest rates go up, so will the amount owed. With rates having gone up steadily for the past two years, many consumers are probably wondering if continuing to keep a home equity line of credit is a good idea.



It may or may not be, depending on the borrower's individual situation. If the credit line has little or no outstanding balance, and the purpose of having the line in the first place is to have a source of emergency funds, then keeping the account makes perfect sense. It's there when needed and if it isn't used very much then the rising interest rates will have little effect. On the other hand, if the purpose of opening the account was to finance a large home improvement project with a cost of tens of thousands of dollars, the borrower benefits tremendously by taking out a traditional home equity loan with a fixed interest rate and repayment schedule.



For some, the rising interest rates, along with the corresponding larger monthly payments, will be more of a factor in their lives than the convenience of having a line of credit at hand. For others, the security of knowing that emergency sources of cash are available whenever they are needed is paramount. Ultimately, it's all a matter of individual need. As interest rates are still pretty low by historical standards, most home equity borrowers will be find no matter which choice they make

until next time

First article on Insurance and Mortgages

Mortgage need one. Walk into any bank or credit union and mention that you’re looking for a loan and you’re likely to be bombarded with fliers, if not hurried into a huge private office to meet their mortgage advisor. Mortgages are big business – and every large financial institution will offer several types of loan for buying property. It’s a good idea to check out as many different lenders as possible before making a decision – experts repeat the phrase ‘shop around’ like a mantra these days and you could save yourself a lot of money by comparing what’s on offer.Your own bank may be a good place to start – if you’ve banked with them for a while and have a good financial record they may be more confident about loaning you a large amount of money such as a mortgage. However, with relatively low interest rates and a booming market, these days the competition among lenders is fierce and you may find a better deal elsewhere. Companies like lending tree and ditek specialize in helping consumers shop around for the best rates. Don’t feel that you have to use the same bank for your mortgage as for your personal account.There are a number of websites that produce tables of comparative mortgage offers – just type ‘mortgage’ into your search engine and see the amount of results you pull up. The financial pages in newspapers carry advertisements as well as news on the latest deals – beware though of being seduced by adverts promising low rates without giving all the details – there’s more to finding the right mortgage than just picking the best rate. The bank are likely to advertise their lowest rate, and you are likely to have to meet certain criteria before qualifying for that particular deal. Check for things like hidden clauses or Higher Lending Charges – these are one-off charges applied to some deals that are supposedly to cover insurance protection for the bank when they lend to you.
Until next time!

The insurance and mortgage game.

Mortgages and insurance our my life. I eat and sleep everything that is related to mortgages and insurance. The aim of my website is to introduce you to different ways of obtaining information about these products. I plan on this blog becoming the de facto place for anything that you could possibly need concerning mortgages and insurance. I hope you will sit back and as time goes on look to the future and we can all share and learn from each other.

I would like your input as to what are the biggest questions you may have. I would like to take a questionaire type format and get your feedback. Your most pressing quesitons to what everyone seems to want to ask but can't find the answer for.

Everyone have a great night and will talk to you tomorrow.