ARMing mortgages with refinance
As monthly payments on adjustable-rate mortgages are starting to balloon, quite a few Americans seem to have found a way to work around their payments. No, it’s nothing illegal — they are only refinancing with new adjustable-rate mortgages that keep monthly payments low - for now, that is, though their payments will likely rise even higher in the future. Registerguard.com reports:
This mini-refinancing boom is assuaging fears that rising interest rates and higher monthly payments would drive some borrowers into foreclosure or force them to scale back sharply on other spending. But the refinancing also represents a doubling-down on a bet that housing prices will continue to rise. If the value of the home falls closer to the amount of the loan, that could curb the ability to refinance.
Read more: For Mortgages, A Shot In The Arms
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August 16th, 2006 at 9:25 am
Home Equity Pitfalls
Home equity loans are appealing to people who have fallen into a downward spiral of debt. Thos who consolidate credit card bills or car loans into a home equity loan are transferring unsecured debt to secured debt and putting their home at risk.
A home equity loan does have some pluses. Compared to other forms of borrowing, it is easier to get, comes at a lower interest rate, and has tax advantages that other loans don’t.
Websites like http://www.homeequitydebtconsolidation.com offer helpful information and a free quote. It doesn’t hurt to see how much you might be qualified to borrow; just make sure you weigh the pros and cons before signing anything.