There has never been an easier time to take out a home mortgage loan. With the introduction of online mortgage lenders and the availability of mortgage information sites, homeowners now have the upper hand when it comes time to choose a lender.
I never thought I would be able to buy a home. I groused about my poor credit scores and bemoaned all of the poor financial decisions I had made in my college years. Our employment “titles” as writers and artists wasn’t going to get us very far, we thought, with banks.
The American dream of homeownership, cheap mortgage money (bigger is better), and relaxed lending criteria has kept our economy chugging along. Everywhere you look there are programs and seminars for “first time” homeowners or “low income” buyers offered by housing organizations, real estate brokers, mortgage brokers, lawyers, and insurance providers. They all tout the move from tenancy to homeownership and in some cases will subsidize the cost that can help you buy, build, or rehabilitate a home.
Mortgage rates can greatly affect the amount of house that you can afford. Whether you are talking about over the life of the loan, or the amount of your monthly payment, mortgage rates can make or break your ability to purchase.
A few years ago you ran into some debt problems, your credit (FICO) score took a nosedive, and you had to take out a second mortgage to cover all the bills. Since that time, you’ve managed to recover financially, religiously paid all your bills on time and wonder if you might not be able to refinance that high-interest second mortgage.
Home equity loans and lines of credit are often both referred to as 2nd mortgages today. The language that surrounds home equity loans has gotten a little sloppy, which is not good because a home equity loan—traditional second, and a home equity line of credit are quite different programs with vastly different implications. Essentially, there are two different types of home equity loans: term, or closed-end loans, and lines of credit.
As rates continue to go the way of gas prices, which is to say much higher than they really need to be, the question inevitably comes up… “when is a good time for me to refinance my home?” Let’s look at a few key things to keep in mind when considering a refinance.
Some things end up being inconsequential, but many can make a huge difference in how well your loan works for your purposes. Here are some questions to ask on every home loan, so that you get a good sense of exactly what you are getting into.