Mortgage,Refinancing,Slowing,B finance, share, loan Mortgage Refinancing Slowing But Still Popular


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Homeowners continue to use mortgage refinancing to cash out their home equity. In the first quarter of 2006, 44% of all Freddie Mac mortgages were refinanced loans, down slightly from 45% in the fourth quarter of 2005. “While more of the borrowers who refinance will be looking to cash out home equity this year,” said Frank Nothaft, Freddie Mac chief economist, “we expect many fewer refinancings in 2006 and slower home-price appreciation relative to last year.” Borrowers are taking advantage of market appreciation. Freddie Mac's cash-out refinance survey reveals that homes refinanced in the first quarter of 2006 had appreciated am average of 30% during the time since the original mortgages, an average of only three years. Ruth Simon of The Wall Street Journal Online reports that, “Home-equity borrowing surged in recent years as millions of Americans took advantage of low interest rates and rising home values to pay off high-cost credit-card debt and fund everything from vacations to home improvements.” Even though mortgage refinancing rates are higher than they have been in years, they are still very attractive compared to other kinds of borrowing. Rates on variable-rate credit cards currently average around 14%, according to Bankrate.com in North Palm Beach, Florida. Mortgage Refinance Advice Is mortgage refinancing right for you? A Consumer's Guide to Mortgage Refinancing by The Federal Reserve Board says it can be a good idea if you: • want to get out of a high interest loan to take advantage of lower rates. This is a good idea only if you intend to stay in the house long enough to make the additional fees worthwhile. • have an adjustable-rate mortgage and want a fixed-rate loan to have the certainty of knowing exactly what the payments will be for the life of the loan. • want to convert to an adjustable-rate mortgage with a lower interest rate or more protective features than the ARM you currently have. • want to build up equity more quickly by converting to a loan with a shorter term. • want to draw on the equity built up in the house to get cash for a major purchase or for your children’s education. You can get free, no-obligation quotes on several types of home loans at E-lends. If the numbers make sense and you decide to refinance, here is some advice from The Federal Trade Commission on how to proceed: • Negotiate. It never hurts to ask if the lender will lower the APR, take out a charge you do not want to pay, or remove a loan term that you do not like. • Ask the lender to give you copies of the actual documents you will be asked to sign for your mortgage refinance. Take the forms home and review them with someone you trust. Ask the lender about items you do not understand. • Be sure you can afford the mortgage refinance. Figure out whether your monthly income is enough to cover each monthly payment, in addition to your other monthly bills. If it is not, you could lose your home through foreclosure or a forced sale. • If this is a refinance of a first mortgage, ask about escrow services. Ask if the loan's monthly payment includes an escrow amount for property taxes and insurance. If not, be sure to budget for those amounts, too.

Mortgage,Refinancing,Slowing,B

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