|
Refinance rates are still low-
In 1998, the 30 year mortgage interest rate
averaged 8.18 percent. Though rates are gradually creeping up,
many homeowners
are
making their move now to
refinance
their current mortgage
to
reduce their interest rate, thereby reducing their monthly payment.
Homeowners may
also take advantage of this window of reduction to convert their
current Adjustable Rate Mortgage (ARM) to a new low rate fixed. |
Private
mortgage Insurance (PMI) is typically required on loans
that are at 81% LTV (Loan to Value) or greater.
If a buyer
puts more than 20% down on his home or if he acquires 20% in equity,
typically he can refinance the loan and drop the PMI.
Equity may be
acquired by making steady payments on the loan, or if there is an
increase of local property values.
If you believe
your home has increased in value, it may be wise to check into a
refinance loan in order to drop the PMI.
|
With
lower interest rates, many
homeowners
are also opting for either home equity loans or no equity loans in
the form of second mortgages.
Second
mortgage loans offer homeowners an opportunity to consolidate credit
card debt, contract for home improvements, or take cash out to be
used for any purpose..
The popularity
of no equity loans is still strong since that particular loan
program may allow homeowners to take out a loan at up to 125% of the
home's current value.
No Equity
loans are usually fixed rate loans. |
