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Archive for the ‘Re-finance’ Category

Introduction.

With unemployment back up to 10% at the start of this year the so called signs of economic recovery and, therefore, many folk’s personal finances, seem to be emulating the weather at the moment. Paychecks and money are either melting away with the snow or being frozen solid as we dare not touch them, for fear of what might happen to our jobs in the near future. One thing that will surely happen as a result of the unemployment figure going up again is that there will be more foreclosures on mortgages.

Foreclosures can mean investment opportunities.

Not wishing to sound heartless but it’s a fact that “one man’s loss in another man’s gain”; and the same is true when it comes to someone having their mortgage foreclosed. If you have some foresight, why not plan ahead and buy a foreclosed property for less than its true market value? Of course mortgage companies will always offer a re-finance mortgage to try and help avoid the foreclosure, but sometime folk have simply over-stretched themselves in terms of the mortgage they could afford. The net result of this in a time of economic recession is that the property market can be become flooded with properties, ostensibly owned by the mortgage companies carrying out the foreclosure. However, they don’t want to hold on to these properties until the economy heats up again and so auction them off to recoup their money. This is where a foreclosed property can turn into an investment opportunity for someone else.

You could turn a new mortgage into a second home investment.

Buying a property at an auction.

Obviously, if you haven’t got the cash to buy with you’ll need to secure a new mortgage before making a bid. Buying a property at an auction you will get it for tens of thousands of dollars less than if it was worth on the open market. Even better, you can make an offer directly to the vendor ahead of the auction or, even better still, if a property doesn’t sell at an auction you can make them an even lower offer after the auction - which if they’re keen to sell will probably accept. Buying a foreclosed property is one way that you can secure a property for a family member, as a dream second home or simply as an investment for the future.

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Introduction.

One of the most frequently asked questions by many mortgage holders these days is whether or not they should re-finance their mortgage. Of course there is no one single answer to that question; and each case needs considering on its own merits. However, hopefully you’ll find the following information about refinancing mortgages helpful when considering whether to refinance or not.

Fixed and adjustable mortgages.

Mortgages come in a range of financial products but are essentially either at a fixed rate, where you pay one percentage interest rate throughout the life of the mortgage or an adjustable rate mortgage, where the interest rate will vary as the prime index one does. Fixed rate mortgages tend to be lower, across the life of the mortgage, but are usually only available to people with top credit scores who are unlikely to default on any payments. Conversely, if you have a poor credit score chances are you’ll have been offered an ARM, which although usually working out at an overall higher interest rate over the life of the mortgage, it will have a cap on how far it can rise at any one time and could, if the markets are right, fall below the interest rates paid on fixed mortgages. The question regarding re-financing really applies to switching ARMs, or if possible switching from an as ARM to a fixed mortgage, as with a fixed mortgage you can budget and plan ahead better for repaying it. There are a number of hybrid fixed-adjustable mortgages too, offering deals like a fixed rate for 5 years followed by a return to adjustable rates.

Is it worth it?

Securing your home with a refinance mortgage could be important for all of your family's sake.

To decide whether or not to refinance your mortgage simply ask yourself - is it worth it or not? Determining the answer to that question isn’t just to do with whether or not your monthly mortgage repayment drops or not. You also have to find out if it will cost you anything to switch mortgage companies in application fees, loan origination fees etc. If it does then refinancing mortgages rarely pays off in the long run. However, a mortgage refinance package that would be good right now is an ARM one so you can get a lower interest rate now or better still a hybrid one - giving you a few years at the current low rates, to help you through what is generally a depressed time economically.

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