How to Refinance a Mortgage

If you have decided to refinance your current mortgage loan or are considering a second mortgage, the most important thing you can do is shop around for the best deal. Mortgage companies come in a variety of different flavors. You might find one at your local bank; however, there are also wholesale mortgage lenders you can access through a variety of sources. There are a variety of retail mortgage lenders, who employ their own officers.

The mortgage industry has become extremely competitive due to the sheer number of mortgage lenders available today. Before you sign on with any one lender shop around, let the mortgage lenders fight over you. Shopping for a mortgage lender is easier than it sounds. Most lenders have information available on the Internet, so it should be easy enough to make a list of prospective lenders that meet your needs. Be sure to get closing costs for each program. Your closing costs should not be more than five percent of the loan amount, excluding the down payment.

Shopping around will allow you to get a feel for the market and find the best deal for your budget. Don?t limit yourself to one or two lenders; there are so many programs to choose from today that you would be doing yourself a great disservice. Shopping for a mortgage is much like shopping for a car. Check out different dealerships, go for a test drive, and then discuss prices. Refinancing your home is a decision you will have to live with for years; you don?t want to make this decision lightly. The more you educate yourself on the process the better suited you will be to make an educated decision that best fits your needs.

To learn more about saving money when you refinance, sign up for our free guide: “Five Things You Need to Know Before Refinancing Your Mortgage.”

Interest rates for the benchmark 30 year fixed rate mortgage remained above six percent for the third consecutive week; this is the highest mortgage interest rate for 15 consecutive months. A survey of national lenders last week stated the average interest rate for the 30 year fixed rate mortgage loan peaked at 6.15%. This is up from 6.1% the week before and the highest interest rate since July of 2004.

Mortgage rates were up across the board; this is the result of uncertainty in marketplace over inflation caused by record setting energy prices and natural disasters in the Gulf coast. The housing market in the United States has been under a record setting boom. Sales of homes are expected to set new records this year in spite of interest rate hikes by the Federal Reserve.

Industry experts are predicting the red hot housing market will begin to cool in 2006 due to higher mortgage interest rates. Last weeks survey stated that sales of new homes is up 2.1% this fall; however median home prices has dropped 5.7% showing the market is beginning to slow.

As for the fifteen year fixed interest rate mortgage, rates were up to 5.69% this week. Fifteen year mortgage loans are popular for homeowners refinancing their previous mortgage loans. Last week this fifteen year mortgage loan averaged 5.65%. Adjustable rate mortgages (ARM) are beginning to lose their luster; the one year ARM is up to 4.91%. Last week one year ARMs averaged 4.89; this is the highest rate for adjustable rate mortgage loans since the spring of 2002.

This could be the headline if President Bush gets his way regarding home mortgage interest next week.

Housing prices stand to lose 15 to 20 percent of value if the President’s tax reform panel’s recommendations are passed into law. One industry expert estimated the average homeowner would lose from $25,000 to $30,000 in equity because of these recommendations.

The housing market drives the economy in the United States; to even consider cutting the tax benefits of owning a home could endanger home values. This change the President is proposing would harm middle class families foremost. According to government statistics over 50% percent of American families that claim mortgage interest tax deductions have an annual income from $50,000 and $200,000.

The final recommendation of the advisor panel will be made later next week. They are expected to recommend to the President elimination of the tax deduction. This deduction will be replaced with a meager tax credit. In addition, they will recommend elimination of deductions or credits for second homes, repealing deductions for property taxes, state and municipal taxes, and reducing the exclusion offered when you sell your home.

The recommendations are outrageous. This is quietly happening backstage in the media to the war in Iraq and the Hurricane disasters. The best thing you can do to protect the equity in your home and safeguard your family’s income is to contact your representatives in Congress and let them know how you feel about the President’s plan to rob your home of equity.

Mortgage interest rates are still climbing this week according to a survey of national mortgage lenders. The interest rate for a 30 year fixed rate mortgage this week was 6.15 percent; this is up from last week where the rate was 6.10 percent. Last fall at this time the 30 year rate was 5.64 percent.

The interest rate for a 15 year fixed mortgages is 5.69 percent this week; this is up from last week’s rate of 5.65 percent. This time last fall the 15 year fixed interest rate mortgage was 5.01 percent. The five year hybrid adjustable rate mortgage (ARM) this week is 5.63 percent, which is up from 5.59 percent last week.

A one year adjustable rate mortgage (ARM) is up to 4.91 percent from last week where it was 4.89 percent. Last fall at this time the one year adjustable rate mortgage (ARM) was 3.96%. Home sales have not faltered despite a gloomy outlook from industry analysts. Mortgage applications are down in October due in part to rising mortgage interest rates.

If you are considering filing Chapter 7 bankruptcy and are unsure how your home and mortgage will be affected there are several things you should know.

When you file for bankruptcy you need to know that all of the property you own at the time of your filing and in some cases property you will receive at a later date is attached to that bankruptcy. This property will be taken by the bankruptcy court and sold to pay your creditors. There are however, exclusions that may allow you to keep your home. What property or assets can be excluded depends on your situation, income, and the state that you live in. The best we to find out if you’ll be able to keep your home is to contact an attorney.

Many states will exclude up to $100,000 in home equity. When determining the value of your home make certain you are appraising its value based on forced liquidation instead of ideal selling conditions. When you have an appraisal of your homes value deduct the amount you owe along with the fees and expenses for the sale from the value; the amount left over is your equity.

For your personal property many states also allow exemptions for various items; these personal effects include your household contents, vehicles, personal items, retirement plans, jewelry, pets, and other personal effects. The actual value of the exemptions you will receive depends on your circumstances and the bankruptcy laws of your sate. Your attorney will be able to tell you how your state’s laws will affect your bankruptcy. Bankruptcy laws do vary from state to state.