Do YOU have a Home Equity Credit Line? YOU SHOULD!

Can’t think of a reason you need a home equity credit line? That’s the
problem. If something comes up and you need money fast the option may be
gone. At least 90% of foreclosures could be prevented or delayed if equity
lines were previously activated. Setting up an equity credit line can often
be done for no cost and can lock in rates as low as 4%. In most cases you
pay nothing each month if you do not access the line.
No one ever expects sudden health problems, loss of a job or emergency
requiring funds fast. By definition, these unforeseen events might prevent
obtaining a loan once they occur. By setting up a home equity credit line
NOW you have money whenever you really need it. No reason to fill out an
application again, just write yourself a check.

When things get back in order, pay back the line and then use it again the
next time. Just be careful not to use the line for frivolous purposes and
you will love your home equity credit line - especially if you never have to
use it. Apply now to get a Home Equity Credit Line!

 

No Cost Refinance-Lower Monthly Payments For Free!

To refinance or not to refinance, that is the question. Conventional
thinking on the subject says if your future rate can be 1.5 to 2 points
lower you should refinance, otherwise costs outweigh the benefits. In
reality, the answer does not come down to a decision based only on rates.No or low cost refinance programs have emerged that may make it advantageous
to refinance for even a ¼ or ½ a point rate reduction. Over the life of a
mortgage starting at $150,000 even a ½ point cut means a savings of about
$18,000. Sometimes these refinance loans come with reduced fees. In other
cases, the cost to the borrower comes to absolutely zero.

While these mortgages deliver what they promise, no cost refinance products
may not offer rates quite as low as those that do charge points. How long
you plan to stay in the house or keep the loan also must come into
consideration. Applying for a no fee mortgage refinance costs nothing. At
that price, no one can afford not to explore his or her options. Apply now to start refinancing your home for free!

Multiple Refinancing for Home Owners

Rates dropped and you figure a refinance of your old mortgage can save hundreds of dollars in mortgage payments each year, maybe thousands. The mortgage broker has prepared the papers with the lowest house payment she could get for you, and wow, was it low. What a no brainer!

You have to do this mortgage refinance, right? Probably, but think about one quick idea first. You took a 30-year mortgage ten years ago. By doing a 30-year refinance now you reduce your payments but now your house won’t be paid off for another 30 years. What if you refinance again in ten more years? Now it will be fifty years from when you bought the house until it is paid off. It doesn’t take too many mortgage refinances like this until you may never pay off the mortgage before you die. Even if you pay it off, even reducing the rate each time, a $250,000 mortgage could cost you an extra $250,000 or more!

Think of this as an alternative. When rates warrant a mortgage refinance, take an amortization on the new mortgage to stick to the 30-year payoff. For example if you are 10 years into a 30-year mortgage take a 20-year mortgage amortization. If you refinance 20 years into the process take a 10-year mortgage amortization. You may even get a lower rate by taking a shorter amortization. Twenty-year mortgages run about one quarter to one half a percent less than 30-year mortgage refinance interest rates. In the short run you will pay more each month, but in the long run the shorter mortgage amortization savings may amaze you. Plus you have the pride of owning your home without a mortgage.

I prepared a chart to show what happens. Using the $250,000 mortgage we talked about above refinancing while keeping to a 30 pay off can save almost $90,000. On the other hand the total money paid after 4 refinances exceeds that figure by almost $290,000. Look at the table; you may insert your own numbers on the interactive page. Do the math, save yourself money and own your house without a mortgage sooner. Try our calculator now to view the differences.

Mortgage Article on Points

A point on a refinance or new mortgage loan means a fee corresponding to one percent of the amount of the loan. A home equity loan or second mortgage rarely carries points. The borrower pays these points to either the mortgage broker or the lender as compensation for creating the loan transaction. In general points represent a mortgage loan broker’s only source of income. They work hard to make a refinance or new mortgage loan come together and deserve to be paid. Regardless of what they are called there are two basic forms of points. The first type I will refer to here as "Upfront Points". Basic upfront points operate as any mortgage borrower would expect, a fee paid for setting up the mortgage. In addition to these points borrowers may have the option of paying additional points to "buy down" the rate. As long as the borrower understands the mathematics there is nothing wrong with buying down a rate using points. Just remember that the numbers dictate that most often a minimum of 3 to 5 years will be needed to break even on buying down a rate. Unless you have a fairly high level of confidence that you will be remaining in the house and you will not refinance for a very, very long time buying down the mortgage interest rate may not make sense. For the majority of people homes are often sold or mortgages refinanced over periods of time 5 years and less making buying down a rate imprudent.

The second type of point I'll refer to as a "Back End Points". The lender generally pays these points to the mortgage broker. In some cases these fees simply represent additional incentive from the lender to the broker to make a particular refinance or new mortgage loan. In other cases it represents a payment from the lender to the mortgage broker as a reward for obtaining a loan with a higher interest rate. For example a borrower may potentially be able to obtain a loan at a 10% interest rate yet the mortgage broker will only offer an 11% interest rate in order to receive two extra back end points from the lender. In cases where a lender is merely trying to promote a certain product and offering brokers a small reward through back end points, for example one point or less, there may be no harm to the consumer. I have seen cases where back end points may be useful, particularly in an effort to refinance to save a house from foreclosure and where available funds are so limited that closing fees make the difference between keeping a house or losing a house. By charging no up front points and allowing the mortgage broker to be paid through back end points it is possible for the broker to make his fair compensation on a loan and for the borrower to complete a transaction with thousands of dollars less out of pocket at time of closing. The borrower in such cases should make sure they are aware of exactly what is transpiring and attempt as soon as feasible to refinance into a lower interest loan.

Fair mortgage points make up a part of most new mortgage or mortgage refinance transactions. Just be aware of what points you may be charged and what represents fair compensation for the mortgage originator and you should have a mortgage you can be happy with for many years.