Low Rate Home Equity Loans Refinancing For A Shorter Term And Better Rate

Writen by L. Sampson

Looking for a better rate is a common reason people choose to refinance their home equity loan. But did you know that shortening your loan term can save you more money than reducing rates? Combine the two and you will save yourself thousands in interest costs and trim years off your payment schedule.

Why Time Matters

While most people focus on comparing rates when looking at loans, they should be equally concerned about the length of the loan. The longer you pay interest on your home equity loan, the higher your interest costs, even with a low rate.

For instance, take a look at a $30,000 home equity loan. Its interest at 6% for 10 years equals costs $9967.43. Interest for a 5 year loan for the same amount but at 7% is just $5642.12 – saving you over $4000.

With some companies, you can also qualify for lower rates by choosing a shorter loan period. Adjustable rates can also reduce your rates, but with the chance that your loan term may be extended.

Rates Still Matter And So Do Lenders

There are a number of costs to consider when looking to refinance your current second mortgage. Interest, closing costs, and annual fees can all add up to thousands. That's why it is so important to investigate different lenders before settling on a loan.

By looking at loan quotes, you can truly find the cheapest loan for your situation. Loan quotes also give you the opportunity to fiddle with loan terms without hurting your credit score. So with real numbers you can decide whether you want a fixed or adjustable rate, 5 or 30 year term, or a cash out option.

Make sure that you look at a number of lenders before signing a loan contract. Take a look at the lesser known companies, which often offer better rates to remain competitive. Recommended companies and broker sites are also a good option.

Consumers have more power today to find the best financing by going online. Reading informative websites, looking at instant loan quotes, and asking questions gives you the answers you need to make the right refinancing choice.

Go to http://www.homeequitywise.com for help finding a Low Rate Home Equity Loan.

Has The Quotbubblequot Burst

Writen by Peter Miller

After watching home values soar during the past few years it looks as if real estate reality is finally about to set in. The home-pricing forecast for 2006 is mild and modest with higher prices projected for the year but not the double-digit increases seen in 2005.

Then again, the forecast for 2005 was also mild and modest and it turned out to be wildly understated.

According to the National Association of Realtors existing home prices were expected to increase 5.3 percent in 2005. Now, however, NAR predicts that 2005 existing home prices will increase 12.7. If the most-recent NAR estimate is true, it would be the largest one-year price increase since 1979.

As to 2006, NAR says existing home prices should grow 6.1 percent.

In the context of what we know about existing home prices, a yearly increase of 6.1 percent hardly seems impressive -- NAR records dating back to 1968 show that cash prices have increased an average of 6.4 percent annually. Also, it's important to say that real estate is a localized commodity -- what happens in a particular area may be radically different than what happens nationwide. It's entirely possible that neighborhood prices may rise while national averages fall -- and vice versa.

The result of NAR''s moderate forecast and the visible slow-down in price appreciation nationwide plainly raises two issues: First, is the "bubble" over? Second, what''s the next step for prudent buyers, owners and borrowers?

Let's start by saying that there has not been a "bubble," a term which suggests unwarranted appreciation. Instead, what we have seen is an unusual combination of circumstances which together have made real estate the investment option of the moment.

In the past few years we have had interest rates at historically low levels. For much of 2003 to 2005 you could finance or refinance at 6 percent or less. As interest rates get lower demand increases because more people can compete for homes and bid up prices.

In many metro areas new home construction is delayed, complicated and made more costly by restrictive zoning regulations and a declining supply of close-in buildable land. The result? Higher prices for those properties that are available.

Between 2000 and December 2005 the population increased from 282.2 million people to 297.9 million -- that''s an additional 15.7 million individuals who need housing. Again, more demand pushes up prices.

In most areas -- but not all -- real estate has been a good place to invest, especially when one considers the alternatives. For instance, on January 14, 2000 the Dow Jones Industrial Average reached 11,722.98. By December 14th of this year -- nearly six years later -- the average was more than 800 points lower at 10,883.51. In contrast, typical existing home prices went from $139,000 in 2000 to $218,000 in October 2005 according to NAR.

Home prices have gone up in part for the simple reason that houses have gotten bigger. The National Association of Home Builders reports that in 1987 a typical house had 1,755 sq. ft. By 2004 the typical house had 2,140 sq. ft. More size produces a higher cost per unit.

What we're seeing today is that some of the factors which have pushed up prices in the past few years are moderating.

Interest rates are now above 6.3 percent for 30-year financing -- a terrific rate for much of the past half century but a full percentage point above the fixed-rate mortgage levels seen in 2003.

Higher interest rates mean two things: First, they limit the ability of borrowers to bid more. Second, they limit the number of bidders at any given price point. A $200,000 fixed-rate loan at 5.3 percent costs $1,110.61 per month for principal and interest over 30-years. At 6.3 percent and the same monthly payment, the borrower can only finance $179,428.

Not only have rates increased in 2005, there is reason to believe they will increase further.

The recent hike in energy prices, as one example, is nothing more than a universal tax on every transaction, product and service. It effectively raises costs that people, governments and businesses will try to re-capture through higher prices, taxes, wages and interest levels. Higher energy prices also directly increase the cost of homeownership.

What does it all mean? Look for a gradual and growing preference toward smaller, energy-efficient properties which cost less to buy and less to operate. With smaller appreciation, watch for reduced speculation which in turn will further shrink demand. Finally, look for savvy borrowers to limit future costs by refinancing now with fixed-rate mortgages -- before rates go still-higher.

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Peter G. Miller is a syndicated real estate and personal finance columnist who appears 70 newspapers.

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Go here for online refinancing and second mortgage loans.

How To Get Your First Mortgage

Writen by Peter Miller

When it comes to lifetime markers getting a first mortgage is a major event. With a mortgage you''re magically transformed from occupant to owner and from tenant to titleholder.

Applying for a mortgage used to be seen as a battle of sorts, a competition where the only winners were those who sold headache remedies and paper by the truckload. But now finding the right mortgage is faster and easier than ever -- but only if you know how to make the system work for you.

If you compare loan applications today with the ordeals of even ten years ago you can see a marked difference.

It used to take days if not weeks to obtain a credit report. Meanwhile a mortgage lender could not act on a loan application because information regarding debts and credit history were simply missing so loan processing times have been greatly compacted.

In 1995 both Fannie Mae and Freddie Mac said local lenders should use the credit scoring system developed by industry-pioneer Fair Isaac to evaluate consumer credit. With credit scoring, a rigorous mathematical profile drawn from a huge number of credit reports is used to measure credit history -- and thus predict future credit behavior. Credit scoring benefits borrowers because it measures how credit is handled, not how much income is earned. You can be rich and have low credit scores; conversely you can be poor and have excellent credit. In practice, the higher your score the lower your rate.

Many mortgage loan programs no longer require income and employment verifications, the physical process of confirming wages and jobs.

A growing number of loan programs do not require individual appraisals -- instead lenders can use automated valuation systems based on tax records and past sales to show the worth of many properties. Automated appraisals are faster and less expensive when available; however they are not obtainable for all properties.

The underwriting system itself has been automated. A conditional lending decision can often be made within an hour of receiving an application.

Lending has gone online. The old advice used to be that borrowers were well served by checking with three or four lenders for the best loans; now it''s possible to compare huge numbers of lenders within minutes. The result is that mortgage lending has become more competitive -- good news for borrowers.

Despite the growing use of computers and electrons however, the fact remains that borrower participation is still required.

Essentially your job is to make sure lenders have application information which is complete and correct. If there are errors in the application you may suddenly face expensive and steeper mortgage costs.

Your lender will supply you with a preliminary loan application showing income, assets, debts and required monthly payments. Much of the application is produced electronically from information received by credit reporting agencies -- but before signing anything go through this application line-by-line to make sure all data is current and correct.

Since you know the lender will be providing an application for your review, you can speed the underwriting process by preparing your financial data in advance.

First, make a list of all assets. You want to show the balances or fair market values for all IRAs, stocks, bonds, mutual funds, checking accounts, real estate, pensions and cars and other major assets. You also want to list account numbers and contact information.

Second, make a list of all debts. You want to include all credit cards, car loans, student debts, mortgages, etc. As with assets, show account numbers and contact information for each liability. In addition, but sure to list required monthly payments for each debt.

What you now have is a handy financial planning tool. It tells what you have, what you owe and how much you''re worth (assets less debits equal you''re net worth). Because there are account numbers, contact information and such, this is good information to keep with wills and living wills. Also, if you enter this information onto a spreadsheet, it''s easy to update and keep current.

Many loan programs no longer ask for income or employment verifications -- however for your records you want to have a file where you keep such things as your last two or three pay stubs from the time of application and copies of your tax returns from the past few years. Also keep information regarding other sources of income such as interest, dividends, profit-sharing, etc.

You now have a way to zip through a loan application -- and you have a way to make sure that lender decisions are not being made on the basis of information which is out-of-date or factually incorrect.

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Peter G. Miller is a syndicated real estate and personal finance columnist who appears 70 newspapers.

Search local mortgage lenders now!

Go here for online refinancing and second mortgage loans.

Home Improvement Loans

Writen by Alison Cole

Depending on what homeowners intend to change in their homes, the task of improving one's home can cost a lot of money. For those who wish to improve their homes but do not have resources to spend, there are home improvement loans that can enable homeowners to complete their home improvement projects.

The types of home improvement loans vary depending on a number of factors. Home rehabilitation loans may be obtained depending on the credit standing of the homeowner, the age of the house to be improved, what specifically is to be improved, and the existing mortgage. Rehabilitation costs are usually pre-set and must reach a substantial amount for financing. The cost of the property prior to and after renovation is also considered. These loans are actually relatively convenient for low-income borrowers, although lenders charge additional fees for the preparation of needed documents, as well as an appraisal fee. Depending on the loan, a mortgage premium is not usually required when applying for a home improvement loan.

The government has reviewed and approved various lending companies that include banks, mortgage companies, and loan associations to make home improvement loans. Since these companies are certified by the government, it lessens the possibility of becoming a victim of fraud.

The eligibility of the homeowner for a home improvement loan depends on his/her ability to pay monthly mortgage payments, which are further backed by the home's insurance policies. The range of the loans may cover simple home improvement projects to the reconstruction of the entire house. Structural alterations, modernizing home functions, elimination of health and safety hazards, appearance improvement, roof replacement, flooring replacement, major landscape work, enhanced accessibility for the disabled, and energy conservation improvements are some of the improvements covered by home improvement loans. Luxury additions are not covered by these loans. These loans may be applied for from an accredited lending company, which may also offer applications online for added convenience.

Home Improvement provides detailed information on Home Improvement, Home Improvement Loans, Home Improvement Catalogs, Home Improvement Remodeling and more. Home Improvement is affiliated with Mobile Home Remodeling.

What Are The Main Types Of Mortgages That Are Available

Writen by Andrew Regan

These days there are hundreds of different types of mortgages: fixed, variable, capped, discount, base rate tracker, offset, repayment only, interest only, and these can also include a variety of options such as the ability to take payment holidays, or avoiding redemption penalties, the list goes on. Choosing the best mortgage for a person's particular circumstances can be difficult, and it is essential to know what the various terms mean prior to making any final decisions on which mortgage provider to go with.

A fixed rate mortgage has a rate of interest which is charged at a set pre-determined rate for a specified period of time. This means that while the fixed rate period remains in effect, even if the banks general base rate were to significantly change, the interest rate charged on the mortgage will remain unaffected.

Variable rate mortgages have an interest rate which can be altered by the lender at any time, usually in line with the banks general rate. This means monthly payments can fluctuate, making repayments drop during periods of reducing rates, but payments may increase if rates start to rise.

Capped rate is a type of variable mortgage with an introductory period where the upper level to which the interest rate can increase is restricted. This means that the rate can decrease below this level, but not exceed it.

Discount rate mortgages are a type of variable rate mortgage where there is an introductory period during which an agreed reduction in the usual variable rate is provided.

Base rate trackers are a type of mortgage which have a variable rate, but follows the Bank of England's Base Rate plus an additional percentage agreed with the lender at the start of the mortgage period.

Offset, also called Flexible or Lifestyle Mortgages, mean that the amount borrowed is linked to a borrowers savings. This is useful because interest rates on borrowings are usually higher than those on savings. By combining both the mortgage and savings into one account through an offset mortgage, the lender will reduce the balance of the mortgage on which interest is charged, by the equivalent of the savings being held. The total amount on which high interest charges are payable is thereby reduced although you do not receive any interest on the balance of savings.

The most common form of mortgage for potential house buyers looking to purchase their home is a conventional capital repayment mortgage. With this type of mortgage the monthly repayment amount includes interest charged on the amount borrowed, along with a portion of the capital sum borrowed. Providing the correct monthly repayments are made on their due dates, then at the end the life of the mortgage agreement, this mortgage will guarantee to repay the total mortgage debt, and the borrower will fully own the property.

Often used for property speculation, interest only mortgages have become increasingly popular in recent years. These require the borrower to repay the interest due on the loan amount, without adding on the repayments to cover the additional capital sum. The borrower may then be required to makes their own arrangements for the repayment of the capital lent through the realization of separate assets or possibly the sale of the mortgaged property, prior to the final completion of the mortgage term.

Payment holidays allow the usually strict mortgage repayment schedules to be more flexible, enabling payments to be occasionally missed without penalty when budgets become tight.

Redemption penalties are an important consideration if there is a chance of the mortgage being paid off prior to the end of the term. Many mortgages will have early repayment penalties levied if the full term is not reached, especially with fixed, capped or discounted products.

To find out more information, most of the major online mortgage providers such as Barclays provide useful sources of information to help buyers make their choice over what is best for their circumstances. Mortgage comparison websites like Moneynet can often also provide impartial free information as well as essential price comparisons. It must be noted that before making any financial decisions you are strongly advised to seek out professional qualified advice from an independent financial adviser to ensure you are legally protected.

Disclaimer: All information contained in this article, is for general information purposes only and should not be construed as advice under the Financial Services Act 1986. Your home may be at risk if you do not keep up with the repayments. You are strongly advised to take appropriate professional and legal advice before entering into any binding contracts.

About the author:
Andrew Regan is an online journalist who enjoys socialising at his local Edinburgh cricket club.