Mortgage - Harvesting Time for Consumers
Lance Williams
Mortgages are for a lifetime today and there is absolutely no trend of savings and 'burning the mortgage' party. Your home equity is more than enough to pay your expenses from. It is one bankable asset. Mortgages help you attain the home and also teaches you how to live by it. With mortgage rates plummeting down the roller coaster, the mortgage applications are rising. The refinance boom is still at large and the fear of being a bubble is slowly vanishing. Mortgage is the best secured loan and the cheapest option for financing.
Mortgage types : There is something for every one.
There is a jungle of mortgages in the market. Conventional mortgages have made way for hybrids. Lenders are continuously expanding their markets by following the mix- and- match policy and churning out customized mortgages with various terms and payment methods to match the borrowers' needs. With such rapid expansion and more mortgages types debuting, the home buyer has his hands full of choices-so many ways to that perfect dream home!
Mortgage refinancing : This is one option which helps you tap the equity in your home and also lock in the current record low rates. The best part is you can shift other debts to tax deductible housing debt. Refinancing can not only reduce your monthly cost but also you can draw out additional funds for other expenses.
Say, your house is worth $500,000 and your mortgage is locked at 6% interest rate. If you refinance it at 5%, earlier you used to pay $3000 every month now you will be paying only $2500 thus saving $500 every month.
Reverse mortgage : For those above 62 years, no income qualification involved, this mortgage helps you with monthly expenses and mainly medical bills which mount during these golden years. You don't have to make any repayments and you get a monthly income which is tax deductible.
Mortgages are for all seasons and all times. According to the Federal Reserve Survey of Consumers, the mortgage debt from households headed by age 65-74 has grown up to 47% from 24.74% on 1995. This is mainly attributed to the huge popularity of reverse mortgages.
Remortgage : Your financial conditions may not remain the same forever. A remortgage allows you to switch to a new deal and lock in lower interest rates and also better servicing from a new lender. According to a survey conducted by the Homeowner Show, 72.8% of property investors are considering a remortgage this year compared to 62.8 % who opted for it last year. Credit card loans and other personal loans which have interest rates as high as 18-30% can easily be paid off using remortgages with rates as low as 6%.
Mortgage Rates : You can either opt for a fixed rate or an adjustable interest rate. While the former as the name suggests remain fixed through the full term of the loan, the latter is adjusted according to the market rate annually or semiannually (according to what is agreed on).
After the recession in 2001 the ARMs have lost a bit of their popularity because certainty and security have become no. 1 on the priority list of the US. Yet the 1 year ARM has fallen drastically to 4.11% from 4.23 the previous week.
While other loans especially credit card loans have rates as high as 18% while mortgage rates hardly rise above 9%.Mortgages are being increasingly used to pay off credit card debts. You can even consolidate your debts and pay them off using second mortgages. These are also called home equity loan. The value of your home can be converted into liquid assets and you can use them any way you like- for education, home improvement (thus building home equity), meeting expenses, investing, etc.
Mortgage - the Next Track
Mortgages have held the US economy together even during trying times. Its robust growth has only the internet business as competitor. It has realized the dream of thousands of low income and minority groups to have home of their own. Though the new purchases have lean market, investors still prefer to put their money into mortgage backed securities which fund the entire housing industry.
Copyright © 2005 Lance Williams
About Lance: Lance Williams is an accomplished contributing writer for http://www.mortgagefit.com/mortgage.html presently working in association with http://www.mortgagefit.com/mortgage-amortization.html.He specialises in mortgage and real estate arena.
The latest information and news on Mortgages:
GMAC's mortgage arm will be tough to unload (Detroit Free Press)
ResCap, the mortgage lending subsidiary of GMAC, "has been a millstone around the company's neck" in the words of GMAC Chief Executive Michael Carpenter. But disposing of ResCap without crippling GMAC's automotive lending business or adding to GMAC's $17.2-billion debt to the U.S. Treasury Departmen...
More consumers pay credit card, but not mortgage (St. Louis Post-Dispatch)
CHICAGO ? U.S. consumers are starting to look like a frugal, debt-fearing lot as they pay down billions of dollars in credit-card obligations. But an alarming trend is emerging: A small but growing number of people are skipping mortgage payments in favor of paying their credit card bills.
Will mortgage rates rise? Fed action only part of the picture (Everett Herald)
Question: We have been hearing that mortgage rates will go up after March 31st because the Federal Reserve will stop buying mortgage bonds. Is this true? How does that work?
More consumers pay credit card, but not mortgage (The Scranton Times-Tribune)
U.S. consumers are starting to look like a frugal, debt-fearing lot as they pay down billions of dollars in credit-card obligations. But an alarming trend is emerging: A small but growing number of people are skipping mortgage payments in favor of payin
Some tax issues to consider on mortgage write-downs (Washington Post)
With the Obama administration and private lenders actively considering mortgage principal-reduction programs to help financially distressed homeowners, the Internal Revenue Service has issued a new advisory to taxpayers who receive -- or seek to receive -- such assistance. The IRS gets involved in m...
Yahoo! News Search Results for refinance
Now best time to buy or refinance? (The Southern Illinoisan)
As the economy slowly begins to recover, changes are takingplace in the housing market that experts said indicate the besttime to buy a home or refinance an existing mortgage may benow.
Refinance may limit financial flexibility (Bankrate.com via Yahoo! Finance)
Reduced financial flexibility may be the price for a home refinance that lowers your mortgage rate.
Refinancing bonds to save Consolidated 5 $450,000 (The Times and Democrat)
The Orangeburg Consolidated School District 5 board unanimously passed a resolution to refinance general obligation bonds that will save the district about $450,000.
Pernod Ricard Plans to Issue Bonds to Refinance Absolut Buyout (Bloomberg)
March 10 (Bloomberg) -- Pernod Ricard SA , the world?s second-biggest liquor maker, is planning to sell six-year bonds to help refinance loans used to buy the Absolut vodka brand in March 2008.
REITs show rising prices but growing risks (Washington Post)
Analysts, bloggers, real estate dealmakers and managers of mutual funds are as puzzled as I am about the 90 percent rise in REIT indexes since March 2009. Commercial real estate lags the business cycle, so shares of real estate investment trusts normally do not rebound until after it's apparent the ...