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