This article explains a few things about Home Equity Loan , and if you're interested, then this is worth reading, because you can never tell what you don't know. Knowledge can give you a real advantage. To make sure you're fully informed about Home Equity Loan , keep reading.

Do you have a house? Well then, you have realized the Greatest American Dream, which many of us continue to work hard to have. Now that you own a house, you already have easy access to money through Home Equity Loan or Home Equity Line Credit. It is thus easier for you to acquire funds for all sorts of reasons. Do you know that lenders can provide you a credit of up to 75% of your total equity?

Are You Lookng to Fund your children’s college education or have you been thinking of that long over due renovations for your house? The Fund may be available through home equity loan or line of credit and you could even pay off the entire balance of your primary mortgage with that fund if you choose to. You may even opt to consolidate your debt, like your credit cards and other unsecured credits with the options available in a home equity loan or line of credit. This facility is getting to be very popular nowadays because of the convenience of owing only one institution and the added advantage of lower interest rates. In addition, interests in consumer loans like your home equity loan or line of credit is tax deductible. The facility of acquiring loan through home equity loan or line of credit is flexible in various payments terms depending on the institution that is providing you with the loan.

All of these flexibility and advantages of acquiring a home equity loan and line of credit requires some intelligent decision-making. This is because even with the numerous advantages available in a home equity loan or line of credit, the only one and most important factor to consider is the fact that you put your house as collateral. Consequently, failing to pay your debt may cause you to loose the most precious asset you have, your home.

So, don't rush into acquiring a loan through home equity loan or line of credit, really evaluate if you really need this facility. Have a plan as to how you will pay for it - without fail-month in month out. There may be other loan facilities available where you can choose from, thus you may not need to put your house as collateral. However, admittedly considering taxes and interest rates may lead you back to home equity loan or line of credit. In this case, you may need to seek additional advice. This is because the two differ in one most significant factor. Home equity loan is a facility where you get the proceeds of your loan lump sum. On the other hand, home equity line of credit is a facility where you have a credit line, just like in a credit card, where you may opt to get funds only when you need it. However, in a home equity loan, you pay equal installments throughout the duration of the paying period and you pay part interest and part principal loan.

In the case of home equity line of credit, the interest rates are variable and you may choose to pay interest only. The negative side of this is that you need to pay a balloon payment at the end of the term, which may be hard for you if you are not ready to pay such a huge amount. You may end up taking another loan, which will put you at a disadvantageous position later on.

Analyzing your needs is advantageous for you to make the intelligent decision. For additional information and advice, you may refer to various financial management websites before you decide if home equity loan or line of credit is good for you. You may find other loan facilities that will not be as risky, but understanding what you need and how you need it may be necessary.

There's no doubt that the topic of Home Equity Loan can be fascinating. If you still have unanswered questions about Home Equity Loan, you may find what you're looking for in the next article.

Most people preoccupy with nothing but interest rates when they are thinking about when the opportune time is for a home mortgage refinance. The aspect most people fail to remember is that there is more to the mortgage refinancing than just interest rates. In many cases, the terms of the mortgage may be sufficient reason for mortgage refinance. One of the most prevalent term issues that prompt a mortgage refinance is the distinction between two home mortgage refinance options: fixed rate loan and variable rate loan. Essentially, there is just one difference between these two options. The variable rate loan exactly means what it sounds like. Loan payments fluctuate monthly and the borrower effectively pays whatever amount is dictated by the prevailing prime interest rate. In point of fact, the prime interest rate in the market is a consensus among a certain group of lenders of what interest rates should be—pretty out of anyone else’s control per se. Hence, for the borrower there are quite a number of negative things that are associated with the variable rate home mortgage refinance option.

Firstly, and importantly the most inconvenient, is that one never knows exactly how much mortgage payment will be for a particular month. Mortgage payments are unpredictable. They may remain fairly steady for a while, albeit a certain level of fluctuation always exists. Depending on the terms of a particular loan, one may unfortunately be paying late fees or incredibly high interest as a penalty to any portion of the payment one fails to make, even if it was merely an oversight. The reason is that one really cannot tell how much the payment should have been. On the other hand, the stability of fixed rate home mortgage refinance option is something that is recommended to alleviate the problem of unpredictability of variable rate loans.

The apparent hype with variable rate mortgages is brought about by the wildly fluctuating interest rates a few years ago. Large fluctuation was attractive because the interest rate has a high chance of going really low. Thus by locking into a fixed rate, one cannot benefit from a situation wherein interest rates plummet. In other words, variable rate home mortgage refinance is suitable for risk takers who are willing to absorb high interest rates for the chance that they could gain from really low ones. The fixed rate option is risk averse.

Still there are many other different types of home mortgage refinance options out there besides the two most common ones that have been discussed above. Other options go under the names of interest only mortgages, discounted rate mortgages, balloon payment mortgages, and negative amortization mortgages. For somebody who is considering mortgage refinance, it is important to do research before you choose which particular option you would take with respect to his financial situation, lender’s rates, lending policies, the prevailing housing real estate market, and lots more. Regrets from choosing the wrong option are mitigated if one pays a little time and effort with research.

In the olden days, you were at the mercy of your realtor, the seller and the mortgage broker. With a fixed rate mortgage, they decided the interest rate, the sales price and the terms of the contract. They made the decisions; you paid the bills.

Early in the days of the Internet, online mortgage calculators quickly became popular. What you used to have to pay for; you could now get in seconds and with many alternatives.

Advanced versions today permit you to make complex comparisons of different kinds of mortgages and can even help you in decisions of when or whether to buy, sell or foreclose.

Mortgage calculators are powerful tools because of the speed and accuracy with which they can deliver information. If you are looking to find out how much mortgage you will pay, a mortgage calculator can analyze and give you a figure within seconds. Time is one of our most precious commodities.

Mortgage calculators allow us to use time more effectively because they analyze so many variables of house buying lightning speed.

If you had to spend the time sitting in a mortgage broker's office while they calculated out every alternative possible to get you the best mortgage, then you would be there at least an afternoon. And that would be for the possibilities for just one lender.

A mortgage calculator allows you to use the interest rates for any number of mortgage lenders in your area. Then it lets you input different variables such as the length of time you want to pay the mortgage.

You set the information for different prices of houses, and not just one, so that you know what your best financial options are. There are a variety of mortgage calculators. Some of them are pretty standard and just permit you to determine the monthly mortgage payment for a fixed interest mortgage or an adjustable rate mortgage.

Others are even more powerful. They allow you to do a comparative analysis using the same loan calculator. By using the mortgage calculator together with a home budget calculator, you can quickly get an accurate overview of your financial situation, and whether or not now is the right time to buy a new property.

Apart from the sophisticated data that the computer is able to deal with, the best part of using a mortgage calculator is that it gives you accurate information in a format you understand.

You do not have to read pages and pages of complicated financial terminology and do complex calculations to find out what you really want to know. The mortgage calculator does not confuse you with the marketing ploys of a lender or broker.

Instead, you input simple figures and get a simple calculation - within seconds - and without leaving your home or office!

Mortgage calculators are powerful tools because they put you in control! You make that appointment with your realtor or mortgage lender confident that you know your financial status and which mortgage you need.

You also have the satisfaction of knowing you have checked out all possible alternatives to find your perfect mortgage.

If you are homeowner struggling with bad credit, qualifying for a mortgage or refinancing your existing mortgage is not out of reach. There is a variety of specialty mortgage lender know as “Sub-Prime” Mortgage lenders that cater to homeowners with poor credit. Here are three things you need to know before applying for a bad credit home loan.

I. Interest Rates Vary Between Lenders

If you are a homeowner with poor credit, you can expect higher interest rates and lender fees on your new mortgage. This doesn’t mean you have to pay outrageous fees; if you do your homework and shop around from a variety of lenders you can still qualify for competitive rates. Interest rates and lender fees vary significantly from one sub-prime lender to the next. Researching these lenders can save you thousands of dollars.

II. Watch Out for Prepayment Penalties

Bad credit mortgage lenders often include prepayment penalties in their loan contracts. These penalties apply if you refinance or sell your home during a period of time specified by the lender. You should try and find a mortgage that does not have this penalty as you will want to refinance this loan when your credit improves.

III. Avoid the Temptation to Exaggerate

When you’re shopping for a loan avoid exaggerating your income, assets, or the state of your credit. If a lender asks you to lie on the application you should not consider borrowing from this lender. Lying on an application or signing blank or incomplete documents is the sign of a Predatory mortgage lender. You can learn more about your bad credit home loan options by registering for a free mortgage guidebook.

To get your free mortgage guidebook visit RefiAdvisor.com using the link below.

If you are a homeowner with recent bankruptcy on your record you might think refinancing your home loan is not possible. Ten years ago this was true; however, today there is a type of mortgage lender that specializes in bad credit and bankruptcy mortgages. Here are several tips to help you qualify for the best mortgage when refinancing your home loan with a recent bankruptcy.

Refinancing home loans is a stressful time for homeowners with good credit. If you are struggling with poor credit and have a recent bankruptcy there are a number of steps you can take to improve the interest rate and terms you will qualify for on the new loan. Here are three steps you can take starting with your credit.

I. Review Your Credit Reports

As soon as your bankruptcy is complete you need to request copies of your credit reports from the three credit agencies. Your credit reports will contain your bankruptcy along with negative information form each of the creditors listed on your bankruptcy. There is nothing you can do about this negative information; however, if you find errors in your credit reports you need to dispute the error and have it removed.

II. Build a Favorable Payment History

Once your bankruptcy is complete open a credit card account with a company that specializes in credit cards for individuals with poor credit. Expect the interest rate on this card to be extremely high; however, you can use this to rebuild your payment history. Maintain a low balance on this credit card and make all of your payments on time. In as little as 24 months you will find creditors willing to work with you offering competitive interest rates.

III. Shop for the Best Mortgage Lender

If you are unable to wait 24 months before refinancing your home loan, you can find a decent lender in as little as six months. Because you will be paying more for your new mortgage it is important to shop from a variety of mortgage lenders and brokers for the most competitive offer. When shopping for a home loan you need to compare all aspects of the mortgage loans, not just the interest rates.

If you are in the process of refinancing your home loan, shopping around for the most competitive loan offer will save you thousands of dollars. There are other steps you can take before applying that will improve the interest rate and loan terms that you qualify. Here are three tips to help you qualify for the best mortgage when refinancing your home loan.

I. Clean Up Your Credit First

Mortgage interest rates are on the rise and anything you can do to improve your credit score prior to applying will save you money. Your credit score has a major influence on the interest rate and terms you will receive on your new mortgage. Your credit score is derived from the contents of your credit reports and because these reports are maintained by three separate companies, they are prone to mistakes. Before you apply for any home loan it is important to request copies of your credit reports and carefully review them for errors. If you find errors you will need to dispute the mistakes with each credit agency.

II. Shop Around for the Best Home Loan

Comparison shopping for a mortgage will help you find the best home loan offer. The Internet is a useful tool for quickly locating and comparing mortgage offers. You can easily screen mortgage loans from dozens of lenders with little time and effort. When you compare home loans it is important to compare all aspects of the mortgages you consider, not just the Annual Percentage Rate. There is a simple way to do a line by line comparison to determine which mortgage is a better deal. You can learn more about mortgage comparison shopping by registering for a free mortgage guidebook at the end of this article.

III. Take Your Time

One common mistake homeowners make when refinancing is rushing through and accepting the first promising offer they receive. When you take your time and learn mortgage terminology you will understand the home loan offers you consider. Comparison shopping will also help you avoid common mortgage mistakes that cost you thousands of dollars. Remember, never rush your financial decisions and you will save yourself money and future headaches.

If you have been holding off purchasing your home because you don’t have the cash on hand for a down payment, there are programs to help you qualify for the home loan. The most popular no money down program is the 80/20 or “piggyback” loan. Here are the basics you need to know about no money down home buying that will help save you money.

No money down mortgage loans have been around for sometime now; however, these loans have had a major disadvantage in that the lenders would require you to purchase Private Mortgage Insurance as a condition of approval for the loan. Private Mortgage Insurance is expensive and does nothing to protect the homeowner, only the mortgage lender.

80/20 mortgage loans do not require the borrower to purchase private mortgage insurance. The reason for this is that when you borrow with an 80/20 mortgage you are actually taking out two loans. Your primary mortgage will be for 80 percent of the purchase price and the remaining 20 percent will be from a second lender. Because you are taking out two loans to fund the purchase of your home, you will have two monthly payments to make.

Because you will have the necessary down payment in the form of your “piggyback” loan, you will qualify for a better interest rate on your primary mortgage loan. The interest rate on your second loan will be higher because this lender assumes more risk than your primary mortgage lender. There are options available for the piggyback loan; you may have the choice of interest only payments, an adjustable interest rate, and a home equity line of credit for this loan. If you choose one of these options for your second loan you may have to pay a higher interest rate, so it pays to shop around before choosing a lender. You can learn more about your home loan options by registering for a free home loan guidebook.

When most people apply for a mortgage, they imagine a cynical person going through their application looking for faults. If this sounds familiar, you might be surprised to learn about automated underwriting.

Automated Underwriting of Your Mortgage

Underwriting has nothing to do with funeral homes. It is the process whereby a lender analyzes your application for a home loan and either approves or denies it. This is known as underwriting and the person that makes the determination is the underwriter. More than a few lenders, however, have at least partially moved away from this process. The primary reason is a human being can only do so much. To this end, traditional underwriting usually took between thirty and sixty days to complete. No more!

Since you are reading this on the web, you know first hand how far the digital age has progressed. Simply put, there is a computer program for practically any need these days. Well, the mortgage business is no different. Many lenders now do automated underwriting of certain loans.

Automated underwriting is simply a process whereby a lender used a computer program to evaluate a loan application. The programs come in many forms, but Fannie Mae offers a couple that the most popular. These programs analyze a number of things. They look at traditional issues such as your credit score, your payment history on other debts, income to debt ratios and so on. Many lenders, however, also use them to analyze whether the loan can be sold on the secondary mortgage market.

If you have ever financed a home or had student loans, you already know about the secondary finance markets. With mortgage loans, there are certain entities that prefer to work with the public and others that do not. Retail mortgage lenders will often process and write a home loan with no intention of servicing it through the 15 or 30 year term. Instead, they sell the loan as part of a package of loans on the secondary markets to another entity that will then process it. Your loan can actually be sold numerous times, a situation that can be baffling for many borrowers when they receive different invoices every few months. Regardless, the secondary market is a big part of the mortgage industry and automated underwriting evaluates your loan application with it mind.

Acronyms seem to be everywhere in the mortgage industry. Freddie Mac is one such acronym and an important one when trying to understand how the mortgage industry works.

A Quick Guide to Freddie Mac

Freddie Mac actually stands for the Federal Home Loan Mortgage Corporation. Based in McLean, Virginia, Freddie Mac is a social financing experiment that has worked out very well. It was created in 1970 by the federal government, but is a shareholder owned entity that trades on the New York Stock Exchange. It remains heavily regulated by the government, which makes it one of the few quasi-publicly traded government agencies/business entities. How it became known by that name is anyone’s guess, but the company performs a very important function in the mortgage industry.

As you know, the real estate market went through an absolutely massive boom recently. A lot of money was moved during that market in the form of mortgage loans. Given the rate of purchase for homes, have you ever wondered where the money was coming from? Well, the lenders were selling off the loans on the secondary market to gain liquidity so they could write even more loans. This is where Freddie Mac comes in.

Freddie Mac is charged by the federal government with providing liquidity in the secondary mortgage market. Simply put, it buys loans from lenders that meet certain classifications. By serving this function, Freddie Mac pumps money into the market, giving the bank the ability to continue to issue loans to you and me. This is reflective of an overall government policy of promoting home ownership, which is the staple of middle class America.

While Freddie Mac stands ready to buy loans from retail lenders, it does not just buy anything. Instead, it issues specifications regarding the types of loans it will buy. As you might guess, first time buyers and low income purchases are favored. The point is to expand homeownership, and Freddie Mac does that through its various policies.

Since Freddie Mac is a publicly traded company, you are probably wondering how it makes money. Well, the company takes the loans it has purchased and sells them to other investors! There is a little twist, however, that makes these loans an excellent investment for private money investors. Freddie Mac guarantees that the investor will be repaid on the loan even if the individual who borrowed the money fails to make all the payments. In exchange for this guarantee, Freddie Mac keeps a small percentage of the interest being paid by the borrower on the loan. When this small amount is multiplied over the total volume of loans Freddie Mac handles, revenues in the billions are generated.

Most of us have all experienced hard times at some stage in our lives and received letters from banks telling us that they are going to charge us £27 for bouncing a cheque or non payment of a direct debit or standing order. Would you like to hit back? Would you like some remortgage tips?

Now is the time to hit back and take some of that money back from them by taking advantage of the discounts that they have to offer to existing and new borrowers. There are massive savings to be had by remortgaging and the bigger your mortgage, the more the potential savings. So, if there is massive saving to be had, why do people not remortgage more often?

Surveys conducted by lenders have identified that some people are just not aware, whilst others have said that they just could not be bothered. Some people have stated that the mortgage market is just too complicated. Bet you would like some remortgage tips?

Well, the range of UK mortgages has increased dramatically over the past few years and although this increase in mortgage types has added complexity, it has also introduced fierce competition, which has in turn resulted in the availability of some very attractive remortgage products for the customer. With over 10,000 mortgage products to choose from, how do we ensure that we get the best remortgages and cheapest remortgage rates?

Employing the services of a whole of market UK mortgage broker can pay dividends here as they have sophisticated computer software to narrow down the mortgage products and arrange the cheapest and best remortgages.

Consider this as a normal mathematical comparison. A 2% saving on a £100,000 mortgage works out at £2,000 per year and assuming that this saving can be made every year by moving the mortgage to another lender, it equates to an astronomical £50,000 saving over the normal mortgage term of 25 years. That equates to £40 per week, every week. It just doesn’t make sense to be putting that sort of money into a lenders pockets when they already make billions of £££’s net profit per year.

If you are having trouble paying your current mortgage, loan or credit cards or you think that you are not receiving the best mortgage deal you possibly can, then perhaps it is time to think about finding the best remortgages. However, many people are unsure about the relative benefits and problems of a remortgage. Here are some useful remortgage tips to help you decide if remortgaging is right for you:

What is a remortgage?
A remortgage is when you replace your existing mortgage loan with a new one from either the same lender or a new lender. This is usually done to reduce monthly payments or to release equity. Remortgaging is usually carried out through a remortgage broker to find the best rates.

Remortgaging for lower payments
One of the most common reasons to re-mortgage is to get lower monthly payments than you do now. If you are struggling to pay off your monthly payments, then you need to look for a better deal, as soon as you can. If you can find one, then ask your current mortgage lender if they can match this, if they would prefer to keep you as a customer at a lower rate than lose you altogether. If they cannot match the rate, then you should look at remortgaging.

Remortgaging to release equity
Another reason why people remortgage is to get hold of some extra money by releasing equity they may have built up in their property. This means that you borrow more than your current mortgage debt to release the money you have already paid into the property and this extra money may be used for debt consolidation or home improvements. This is especially useful if your property has gone up in price or if you have paid off a large percentage of your mortgage. It is like getting out a loan, but the rates are low as they are part of the remortgage.

If you are a borrower, either in the form of mortgage or loan, chances are alarmingly high that you are being or have been periled by lenders, brokers, and banks by their routinely changing loan terms between the time of application and closing. Sometimes, they can have justifiable reasons for doing so, but more often they don't.

Reasons

Sometimes, rejection does happen due to some mistakes that can be fount in your past credit history. Though they may have happened in the past, the consequence remains in the present. Many times people don't closely monitor their bills and accounts and sometimes miss payments or pay late. This can heavily damage your credit and may constitute and obstacle when trying to get approved.

Common Obstacles

In certain cases it may be hard to get a mortgage, for example if you are self-employed or if you have had debt problems in the past. Other probable situation is that if you're retiring within the next 2-3 months, then this situation can impede you from getting approval for mortgage. What’s the reason? Probably, because the lender thinks you won't be able to make the payments once you stop working.

It could be your income or employment status, or because of problems with the property. You could apply again to a different lender; however, you previous rejection will show on your credit report. If you have a bad debt case registered with a credit reference agency, you must ensure that correct details about you are recorded at the agency. If you find any information to be incorrect, contact the agencies to get your record corrected and inform the lender about the error committed on their behalf.

In case, a mortgage broker or lender has unfairly treated you, you can make a formal complaint. Under the Mortgage Code the firm ought to have a complaints procedure.

Read Thoroughly Before Applying

Often, the problem with some customers is that they forget to read everything specified in the promotions. Lenders may overstate the scope of what they're offering, just by throwing out terms like "pre-approved" or "approved, provided these conditions are met" and giving a superficial explanation in the fine print. This helps the lenders to cancel or modify their offers for countless reasons. When you object changes in the offer or in the loan terms, lenders just point out those disclosures.

So, whatever you apply for is never guaranteed because there are variables during the process that may change the initial assumed profile of the loan.

Borrowers unfamiliar with the ins and outs of the lending business could proceed happily towards closing on the loan, only to get surprised by a negative. Or to find out that they're going to pay up a few thousand more dollars or lose their houses and loans. Lenders think they don't need to cite a genuine reason to change the loan terms. Usually, brokers and lenders will just add some extra costs into a loan to book their profits. Thus, you need to be aware of your rights and read everything prior to signing.

If mortgage payments are suddenly higher, the most probable aspect to blame would be the ever-rising mortgage interest rates. The reason is that since 2004 the Federal Reserve Board has raised the fed-funds rate, which influences mortgage interest rates, 17 times. In recent years, many people have taken advantage of near-record-low interest rates while scooping for real estate properties. In order to make mortgage payments even lower, many signed up for variable-rate home mortgage refinancing options.

One of the benefits of variable is that you get an extra-low interest rate for the first few years of the loan, and then, often every year, it gets reset to reflect the actual market movements in interest rates. For a “5-1” variable-rate mortgage scheme, the loan is fixed at a low introductory rate for five years and then begins floating in relation to interest rates each year after that. However, if the market interest rates surge up, the rate of your own will consequently rise, albeit caps for regulating rates from rising too much are in place.

The risk is that one could end up paying 10% or more on a home mortgage refinancing in later years. This is not quite apparent in fixed-rate home mortgage refinancing wherein one’s loan will be locked at a rate, say 6.25%, until the whole loan is paid. The risk is not at all senseless—that is if you plan to leave the home after a few years, variable-rate home mortgage refinancing can make a lot of sense. You get an extra-low rate initially, and you are not likely to be around if and when rates escalate.

Not everyone is fortunate enough to figure out such a trick. Some are blinded by the chase of the cheapest rates out there, grabbing variable-rate mortgages for the really low introductory rates that these offer despite planning to stay in their new home. So now that the tide seems to be turning, and rates are rising, the potential heartache for a lot of people is looming. According to a report from ACORN, the national community advocacy group, about 75% of subprime home loans were variable-rate mortgages.

Many people have opted for even riskier home loans than ordinary variable-rate mortgages. Some signed up for interest-only loans and negative-amortization loans, and according to a Los Angeles Times article, "substantial numbers of borrowers using interest-only and payment-option loans have modest incomes and could already be stretched financially."

There are some suggestions that can mitigate such risks. The most reasonable would be to switch to risk-averse options such as 15-year or 30-year standard amortization schemes. Another practical tip suggests switching to an interest-only mortgage option if full payments are currently not feasible. The positive feature about interest-only payments is that these would not result in still-higher principal debt balances to pay off later.

Sandra Block offered some beneficial advice to potential borrowers in a USA Today article. She explains, "Look for lenders that have raised their borrowing limits for conforming loans. Rates on conforming loans, which are loans that lenders can sell to Fannie Mae and Freddie Mac, are a quarter to three-quarters of a percentage point lower than those for jumbo loans."

Home mortgage refinancing—such a technical sounding word for a newbie in the real-estate market scene. Having the right set of information about it guarantees anyone to make the right decisions when it comes to paying for a home property. Here are some basic things one should learn about home mortgage refinancing. A house can be bought at 0% down payment. It may be overwhelming to believe this fact but there may even be government agencies, particularly the Department of Housing and Urban Development (DHUD), which will assist closing home costs. Although such options are not available to just anyone, first-time homeowners and homebuyers of inadequate resources are advised to carry out some research. For those who do not fit to any of the categories listed in DHUD’s website, it would be worthwhile to inquire a mortgage broker or lender about the loans that they offer. For example, an “80-20” loan means that the borrower is allowed to take out a first mortgage for 80% of the contract price and a home equity loan for the remaining 20%.

Mortgage brokers can be very useful for many people. A good mortgage broker can render advice about the types of mortgages that would best suit you. With their knowledge and experience about home mortgage refinancing, they can probe through loan products of many lenders and effectively find the optimal rate and deal. But similar to many professions, conflicts of interest can plague the mortgage broker industry. One way to avoid being afflicted with such issue is to research on topics about, as well as actually seek out for, ethical mortgage brokers. If you personally know one such as a mortgage broker friend, use the acquaintance and trust to your advantage.

Nevertheless, not everyone needs the assistance of a mortgage broker. The best use for a mortgage broker’s service is when you are loaded with financial issues, such as a poor credit history. In the absence of such financial concerns, a mortgage broker is not at all required. For someone who has a clean credit slate and plans to put at least 20% down payment on a new home, a call to a few banks to ask for the best rates suffice.

One can also find even more attractive home mortgage refinancing rates from a local credit union or from the Internet. If you are not a member of a credit union, joining is possible through a family member, workplace or an association to which you belong. The Internet is a great arena to search in as well.

There are some websites, equipped with mortgage payment calculators that will crunch many interesting numbers for you. Through some sample calculations, one can learn exactly how much of each mortgage payment will move towards the principal of the loan against the interest. For example, only about $200 of a $1,200 monthly mortgage payment goes toward the principal in the first year (the remaining $1,000 being the interest), compared with about $800 in the 25th year.

There are also several home mortgage refinancing options that one can avail. The most popular of these, especially in hot real estate markets today, is the variable-rate mortgage, which comes in several varieties. In a nutshell, a variable-rate mortgage is characterized by an interest rate that fluctuates every year. However, for somebody who is pretty certain of not leaving the home for just a few years, a scheme such as a “5-1” variable-rate mortgage, which offers a fixed introductory rate for the first five years, then readjusts each year after that, can be availed. While 30-year fixed-rate mortgages can offer as low as around 6.2%, “5-1” variable-rate mortgages offer in the 5.8% range. This translates to a saving of $100 every month or equivalently, $1,200 every year. There are also other schemes like “7-1” and “10-1” variable-rate mortgages.

Because of the fluctuating nature associated with the term “variable-rate”, first-time renters may interpret a variable-rate mortgage scheme as being very risky as interest rates can skyrocket over one or two years. In reality however, variable-rate mortgages are generally restricted in how rates can increase each year.

As monthly payments on variable-rate mortgages are starting to swell, many Americans have found a way to defer the day of reckoning. They have turned to variable-rate mortgages in recent years to afford a home as prices escalate. Refinancing with fresh variable-rate mortgages, for now, are successful in keeping keep monthly amortizations low. However, due to the fluctuating nature of variable-rate mortgage refinancing, their payments will likely rise even higher in the future.

Typically set at synthetically low rates during the first years of the loan, variable-rate mortgages are then reset at par with the prevailing market interest rates. The stake for borrowers was that interest rates would linger at low levels.

Recently, the first big wave of the mortgage boom is peaking as more than $400 billion worth of variable-rate mortgages, or about 5% of the total outstanding mortgage debt, will readjust in the current year 2006 for the first time. This figure is based on a projection made by Loan Performance, a research firm. In 2007, another $1 trillion of mortgage loans will readjust. When the readjustment takes place, a typical borrower, say with a $200,000 variable-rate mortgage could witness a nearly 25% increase in monthly payments as the mortgage adjusts from the introductory rate of 4.5% to the prevailing rate of 6.5%. Equivalently in total dollars, the monthly amortization will climb from $1,013 to $1,254. Confronting such imminent plight, many borrows are refinancing into their second or third variable-rate mortgage rather than paying more now, as mortgage industry experts confirm and loan data indicate.

So far, the number of borrowers that opt for variable-rate mortgage refinancing is relatively small. However, mortgage industry analysts anticipate that the numbers will surge in 2007. Quite commonly, these borrowers are putting off any eventual shock of higher payments by another two to three years, if not longer.

For now, this refinancing boom is alleviating apprehensions that rising interest rates and higher monthly amortizations would induce some borrowers into foreclosure or coerce them to sharply cut back on other spending. Consequently, consumer spending may endure contrary to what some economists had expected.

Nevertheless, mortgage refinancing also corresponds to a doubling-down on a stake that housing prices will continue to go up especially in hot real estate markets such as Miami, Tampa and Sarasota. A value of a home that falls closer to the amount of the loan could curb the ability to refinance. As a result, this may prompt the homeowner to either sell the home or invest more in it.

Notwithstanding, borrowers still believe that loans make sense because many of them plan to move to another home in a few years or earn more. They refinance again, often using the same assumptions they held when they made their earlier loans.

Though it has been around for decades, the use of variable-rate mortgages has skyrocketed in the last several years, essential in triggering the housing boom by letting people borrow more than ever before.

Variable-rate mortgage loans come in many forms. While most have low and fixed introductory rates, other forms such interest-only option also let borrowers pay only the interest portion of the debt, or better yet, even less than that. After the introductory period ends, lenders readjust towards bigger payments while ratcheting up interest rates.

If you are concerned how rising mortgage interest rates will affect your monthly payment amount, refinancing your loan could protect you from economic uncertainty. There are many advantages to refinancing your home loan, regardless of interest rates. Here are the basics of refinancing your home loan to help you choose the best mortgage offer.

There are a number of factors affecting your mortgage that you have no control over. Interest rates are one such factor. If you purchased your home using a risky interest only or option adjustable interest rate loan and are nearing the end of your introductory period, you might want to consider refinancing before your mortgage payment becomes unmanageable. There are several types of mortgages you will want to consider when refinancing depending on your financial objectives. Here are the basics of mortgage loan types.

Fixed Interest Rate Home Loans

If you purchased your home with an Adjustable Rate Mortgage you probably chose this loan because of the low payment amount during the introductory period. The problem with Adjustable Rate Mortgages is that when this introductory period ends, the lender will adjust you interest rate and monthly payment amount. If your budget is stretched to the limit during the introductory period, you run the risk of falling behind on your payments when the lender adjusts your loan and losing your home at foreclosure. By refinancing your mortgage to a fixed interest rate home loan you will have the financial peace of mind knowing what your payment will be every month and the ability to budget accordingly.

Hybrid Adjustable Rate Mortgages

Hybrid home loans offer the best of both worlds. There is an introductory period that can last as long as ten years where your loan has a fixed interest rate. At the end of your introductory period the loan is converted to an adjustable rate mortgage at the prevailing interest rate. One of the main advantages of a hybrid home loan is that the initial interest rate will be lower than that of a comparable fixed rate loan. If you plan on selling your home or refinancing at the end of the fixed rate period, a hybrid mortgage could save you money.

Which Index Does Your ARM Track?

If you are considering an Adjustable Rate Mortgage you need to consider how interest rate changes will affect your payment amount. The mortgage lender will periodically adjust your interest rate and payment amount to the prevailing rate of the index your loan tracks and add lender markup. Some indexes change more than others, meaning your payment amount will be more susceptible to these changes. By choosing a loan with a less volatile index you will be less susceptible to changes in your mortgage payment.