Refinance Your Increased Equity with a Low Rate Mortgage Refinance Loan

"If you have to pay some extra costs to close your existing mortgage, then you should take care that the new Home mortgage refinance loan is giving you sufficient benefits for you save more than what you will have to spend."

Homeowners can keep hope to get approval for refinance even if they are going through bad credit period. To get this benefit you may consolidate mortgage loans. Because of the economic recession lenders have better than normal offers with lower rates. However, you should not forget that the refinance process must satisfy your financial budget needs. Professional help from companies like USLOANZ can assure proper documentation and representation of homeowners for quick and successful Bad credit mortgage refinance loan.

1. Lower Interest Rates Give Benefits.

You must first go through your existing mortgage terms to check for any penalties like prepayment and closing costs. Many lenders do not want to lose their future earnings in the form of interest. If you have to pay some extra costs to close your existing mortgage, then you should take care that the new Home mortgage refinance loan is giving you sufficient benefits for you save more than what you will have to spend.

According to mortgage loan experts, these costs can be worth only if the new lower interest rate is 2% less than the current one. Now the thing to check is whether your interest rate is variable or fixed. If it is variable, you may require more than two percent difference. What you can do is negotiate a fixed rate at current low rate offer, which could prove to be a good deal over the term of the loan.

2. Refinancing your mortgage once is enough.

Many homeowners think it is clever to refinance not once but again and again keeping a reasonable time in between. They wait for lower interest rates and refinance to take advantage. But they forget that the closing costs and other penalties can decrease the benefits of a Second mortgage refinance loan to negligible amounts especially if the period of the lower interest rate is short. Home mortgage must last a long term for maximum benefits. If you avoid changes due to lower rate temptations, the appreciation in your home equity value, the amount you save over the term by going steady will give you far more benefits at the end of the mortgage term.

3. Smaller Monthly Payments.

If you require smaller more affordable monthly payments, then you can get Low Rate mortgage refinance loan with longer payment term loan. It does not need to be pointed out that the longer you have a mortgage debt, the more you pay in interest along with your monthly payments. If your mortgage is an ARM, the changing prime rates will not let you have any idea on how much you will eventually lose over the term of the loan.

4. Prepayment Penalties

In some cases, homeowners with sudden increase in their income may want to increase their monthly payments. If your such refinance home mortgage loans allow paying off your loan quicker. You need to check out the penalty terms for such payments with your lender. Understand them before you increase your payments as the lender may overlook to mention the penalties.

5. Consolidate Mortgage Loans.

A number of refinances from different lenders without closing previous mortgages may become unmanageable demanding time, effort and finances. In such cases, homeowner must refinance to consolidate home mortgages. Manage to get overall lower rates and an extended term and your monthly payment may become one affordable mortgage payment.

In order to benefit from the above mentioned alternatives, you can take advantage of the web to shop for Mortgage refinance quote online on websites. The Internet comparison sites can offer quick help.

Home foreclosures likely to grow

General Motors made a profit in 2010. Ford made even more than GM. The Dow Jones has regained more than 75 percent of its 2009 losses. Have we made the turnaround?

Not in the housing industry.

There are about 80 million homes in the U.S., and about 40 million have mortgages. About 10 million have an additional second mortgage in the form of a "home equity" loan. As the housing market was imploding in 2007, many home prices dropped in value below the amount of the outstanding mortgage -- they were "under water."

Twenty-three percent of the mortgages in the U.S. are underwater -- that's more than 9 million. Of those, 16 percent have mortgages which are underwater by more than 10 percent of the mortgage's unpaid balance. Almost 10 percent of all mortgages -- about 4 million -- are under water by more than 25 percent of the home's value.

The majority of all U.S. mortgages were underwritten by the combination of the Federal National Mortgage Association, Fannie Mae; and the Federal Home Mortgage Corporation, Freddie Mac. They held 90 percent of the secondary mortgage market by 2005.

Fannie was started in 1938 by President Franklin Roosevelt as a stimulus to the ailing economy. Initially it was a part of the U.S. government. As such, it could borrow money at low interest rates because any failure had the full faith and credit of the United States. In 1970, President Nixon created Freddie Mac.

In 1968, President Lyndon Johnson privatized Fannie. It was now known as a "government-sponsored enterprise." Although it technically did not have the full faith and credit behind it, it was taken for granted that the U.S. would back up any problem. It was referred to as an "implicitly taxpayer-backed agency" -- but now run as separate, for-profit corporation. Investors would purchase its stock and then it would purchase mortgages from primary mortgage lenders, making it a secondary mortgage lender.

It was profitable because of the implicit promise: It could borrow from lenders around the world at interest rates lower than it was being paid by the borrowers of the mortgages they bought.

The imploding housing market caused millions of dollars of losses in 2007. In 2008, Fannie and Freddie admitted to "accounting errors" of between $4.5 and $4.7 billion. More and more underwater mortgages started piling up until it appeared certain they would both fail. To avoid collapse of our economy, the federal government purchased 79.9 percent of each one on Sept. 9, 2008.

Fannie and Freddie now had to sell their growing inventory of foreclosed homes. It was necessary to hire a locksmith to re-key the house and repair any damages the previous owner caused on his way out. A common trick was to remove the built-in appliances as well as the kitchen cabinets.

Normal maintenance was also required. Cutting the grass cost $80 every two weeks -- amounting to a monthly bill of $10 million. In total, all the upkeep, refurbishments and taxes cost taxpayers more than $1 billion per year.

The houses they were able to sell brought in about 60 percent of the unpaid remaining amount of the mortgage. In areas such as Arizona, California and Florida, it was less than 50 percent. Because central Ohio didn't experience the previous huge price inflation of those states, we have not experienced such a steep drop. Average home prices here peaked at about $175,000 in 2005 but only declined to just under $159,000 by 2010 -- lower in Columbus and higher in the suburbs.

Fannie and Freddie were required to write down the value of the mortgage, paying the primary lender the amount of the write-down.

So far, keeping Fannie and Freddie going has required $145.9 billion of taxpayer money. It is estimated the total will grow to $389 billion, making them the largest bailout from the "Great Bush Recession."

Nationwide, there were 2.9 million foreclosure filings in 2010 -- up 2 percent from 2009. The foreclosure rate might slow down later this year, but probably not during the first half. That is the result of a mid-2010 scandal where bankers and lawyers were improperly processing the data of the mortgages. There was one case where a home was foreclosed but it had no mortgage at all.

This caused a bubble to build up during a slow-down in actual foreclosures during the fourth quarter of 2010, which will spill over into the first quarter of 2011.

The saddest part of this whole tale is that 2.3 million American families have lost their homes to foreclosure, with more to come.

Scamehorn is a longtime resident of Lancaster, Ohio University's executive-in-resident emeritus and former president of Diamond Power. He has traveled extensively in the business arena and enjoys history.

Mortgage Home Loans at Bank of America (NYSE: BAC) Today

Although lending in general has tightened up and is subject to greater scrutiny than it was just two years ago, home equity based loans or mortgage loans are still a popular option when a significant amount of cash is needed. These home loans allow borrowing to take place against equity in a home. Essentially the loans create or extend a mortgage against the portion of the home that is not already subject to an existing mortgage.

At Bank of America today current home equity loan APR's are 6.89%. Home equity loans behave like mortgages in that there are fixed payments for a pre-set duration of time, like 30 years for example. Home equity lines of credit start at 4.37% on an annualized basis.

Home loan rates above assume a Combined Loan to Value (CLTV) ratio of 60% or less. The maximum CLTV allowed is 80%. Interest rates may be higher for higher CLTV's. The CLTV is the combined amounts of all mortgages on the property divided by the properties assessed actual value at the point in time of the loan origination.  So a house appraised at $200,000 with a mortgage principle balance of $80,000 and a home equity loan of $20,000 would have a CLTV of 50%.

Home equity loan

A home equity loan (sometimes abbreviated HEL) is a type of loan in which the borrower uses the equity in their home as collateral. These loans are useful to finance major expenses such as home repairs, medical bills or college education. A home equity loan creates a lienagainst the borrower's house, and reduces actual home equity.

Home equity loans are most commonly second position liens (second trust deed), although they can be held in first or, less commonly, third position. Most home equity loans require good to excellent credit history, and reasonable loan-to-value and combined loan-to-value ratios. Home equity loans come in two types, closed end and open end. Both are usually referred to as second mortgages, because they are secured against the value of the property, just like a traditional mortgage. Home equity loans and lines of credit are usually, but not always, for a shorter term than first mortgages. In the United States, it is sometimes possible to deduct home equity loan interest on one's personalincome taxes.

There is a specific difference between a home equity loan and a home equity line of credit (HELOC). A HELOC is a line of revolving credit with an adjustable interest rate whereas a home equity loan is a one time lump-sum loan, often with a fixed interest rate. This is a revolving credit loan, also referred to as a home equity line of credit, where the borrower can choose when and how often to borrow against the equity in the property, with the lender setting an initial limit to the credit line based on criteria similar to those used for closed-end loans. Like the closed-end loan, it may be possible to borrow up to 100% of the value of a home, less any liens. These lines of credit are available up to 30 years, usually at a variable interest rate. The minimum monthly payment can be as low as only the interest that is due.

National home equity loan rates for Jan. 27, 2011

Home Equity

• 5.56% (line of credit)
• 7.14% (loan)

Here's a look at the state of home equity rates from Bankrate.com's weekly national survey of large banks and thrifts conducted Jan. 26, 2011.

Loans based on home equity showed little movement in the last week. A standard home equity loan fell 1 basis point, to 7.14 percent.

The typical home equity line of credit, or HELOC, was unchanged at 5.56 percent.

A basis point is one-hundredth of 1 percentage point.

To find the best home equity loan rates in your area, check Bankrate's interactive tool.

See all home equity loan rates content.

Read more: Home equity loan rates for Jan. 27, 2011 http://www.bankrate.com/finance/home-equity/national-home-equity-loan-rates-for-jan-27-2011.aspx#ixzz1CLU4K2Z7

Mortgage insurance, housing and the Canadian economy

EDMONTON, AB, Jan. 22, 2011/ Troy Media/ – According to a November 2010 survey by the Canadian Association of Accredited Mortgage Professionals, 30 per cent of mortgages issued to new home buyers in Canada over the past 12 months were for 35 year periods (renewals were at five per cent).

In 60 days, new mortgage insurance rules will eliminate this option and also make it more difficult to access home equity. The reason behind these changes is to cool debt accumulation, which will become more costly as interest rates rise; however, preparing for the economic future likely implies paying some economic costs today.

Cooling the economy

There are two channels through which changes in the real-estate market directly influence the economy: 1) new housing starts/renovations; and 2) the service industries that support sales, i.e. realtors, lawyers and financial institutions, engineering and architectural services. There are also two indirect channels: 1) income generated from these activities finds its way into other areas of the economy, such as retail sales and government revenues; and 2) consumers tend to spend more/save less as the equity in their homes rises.

Just how much money does the sector generate? As of 2009 a total of $12 billion dollars was spent by real-estate developers on residential properties in Alberta. That's just shy of five per cent of provincial GDP, down from its peak of 6.3 per cent recorded in 2007. As for services, in 2008 real estate agent offices in Alberta generated $1.8 billion in revenues versus $1.2 billion in expenses and, although it's not possible to discern how much revenue banks and law firms generated from housing it's a substantial amount. Conservatively, we can put the direct contribution of real estate at around 7.5 per cent of the provincial economy. When the indirect spending is included, that figure is likely boosted into the double-digits.

How the shorter-amortization requirements impact the housing market will depend on how the first-time  homebuyer responds to the changes, as they were by far the most likely to take out 35 year mortgages. According to a recent report by Royal Lepage on first-time homebuyers, they represent approximately 30 per cent of home sales in Alberta. New construction tends to be out of range, as are detached bungalows, meaning these buyers look more at the resale market and the condo market in particular.

Some potential new buyers will simply not be able to qualify under the shorter amortization periods, but a bigger concern might be in regards to how these households perceive the benefits of owning versus renting. Shorter amortization periods save purchasers money in the long-run (pay less interest), but often it's the monthly outlays that are at the forefront of people's purchasing decisions. The hundred dollar monthly difference now makes renting appear cheaper, especially in an era of increasing rental incentives and declining rents. All told, it wouldn't be surprising to see sales decline slightly.

With the exception of some condo-buildings, investment in new home construction is not targeted at the first-time homebuyer. As individuals build equity they move up the property ladder and it's here where new homes are absorbed. Even if prices soften, builders might not put away their hammers as the profits might still outweigh the risks associated with not moving housing units in a timely fashion.

Households less than prudent

A lot of research shows that home-equity loans were replacing other sources of lending, such as private car loans and credit cards, as it was a lower source of funds. Low interest rates, combined with rising resale values, made this an even better deal and it's clear that many households were less than prudent. As the rule changes won't impact home equity lines of credit (HELOC) already in place, hopefully any major contraction in spending will be avoided.

Whether we're not saving enough for retirement, using the HELOC to pay for that vacation or just procrastinating, there's something very human about wanting what we want now. The new rules laid out by the government will simply take that choice away for those most at risk and, in the long-run, that's not necessarily a bad thing.

Read more: Mortgage insurance, housing and the Canadian economy | Troy Media Corporation http://www.troymedia.com/2011/01/22/mortgage-insurance-housing-and-the-canadian-economy/#ixzz1BgXnxgQk

Home Equity Loans: Second Mortgage Loan And Home Equity Line Of Credit

A home equity line of credit and a second mortgage loan are both forms of home equity loans. However, when you are out to apply for these you need to have knowledge of advantages and disadvantages of either of these options. This could enable you to choose the right option for your specific financial situation.

A home equity loan could be of two types- second mortgage loan and home equity lines of credit (HELOCs). Depending upon your specific financial situation and the amount of money you might need, you could go for either of the alternatives. But each of these options have advantages as well as disadvantages and therefore, when you are considering applying for a home equity finance, it could be important for you to have knowledge regarding the pros and cons of either of the choices. Here is some crucial information which could guide you in your endeavor to take the right decision if you are planning to apply for one.

1. Home equity lines of credit (HELOCs)

   Home equity lines of credit or HELOCs provide a greater degree of flexibility to borrowers. But while using a HELOC you need to ensure that the purpose of obtaining it is achieved. To that effect, with a home equity line of credit loan, you could carry out renovation of your home for which financial budget is usually fixed. Remember, HELOCs are in a way comparable to debit cards or credit cards which are tied to the equity built up in your home.

   These types of home equity loan finances normally come standard with variable rates of interest which are much higher than those provided on second mortgage home equity loans. Since the interest rates are variable there are chances that they could get adjusted at regular intervals. As a result, your monthly mortgage payments could increase once your lender resets the home equity line of credit rates associated with the HELOC loan. Alternatively, you also need to take care that you are not tempted to spend money recklessly as a HELOC is very much a debit card.

Get Qualify Today For Home Equity Line Of Credit

2. Home equity second mortgage loans

   Home equity second mortgage loans could be more beneficial in comparison to home equity lines of credit. Normally, the second mortgage rates are fixed over the entire loan duration and you could borrow any amount desired regardless of any kind of temptation. Second mortgage loans could be ideal propositions for getting rid of high interest credit card debts and the best thing about them is that the interest rates are tax deductible under federal income tax laws. But in a way you are only restructuring your credit card debt payments and not completely eliminating them.

   Get Approved for Second Mortgage Loan

   From the aforesaid it is quite clear both the proposals on home equity loans involve risk as in either case your property is getting mortgaged. Above all, the interest rates provided on home equity loans could be much higher than those offered on primary home mortgage loans. So decide what is better for you.

To get more useful information on affordable HELOC or second mortgage interest rates, it is hereby recommended to use the professional services offered by reputed online service providers like LoansStore.