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