Second Mortgages Can Cap Housing Costs

In these times of rising interest rates- second mortgages or first mortgage refinancing might be just the thing to keep your housing costs from going through the roof. In a recent article in Parade Contd...

In these times of rising interest rates- second mortgages or first mortgage refinancing might be just the thing to keep your housing costs from going through the roof. In a recent article in Parade magazine- How To Save on Your Mortgage- Lynn Brenner considered the question-

“Will Your Mortgage Rate Go Up?”
“If you have a fixed-rate mortgage- you have nothing to worry about. But millions of home owners are sitting on a financial time bomb: Their monthly payments are preset to skyrocket sometime in the next 18 months. These owners have hybrid adjustable rate mortgages (ARMs)- which start with a fixed rate for three to 10 years but later are adjusted annually.

“Let’s say you bought a house in 2003 with a $200- 000 three-year hybrid ARM. For the first three years- your rate was about 3.8% and your monthly payment was $930. But this year- your rate could be reset to 7.3%- says Greg McBride- senior analyst at Bankrate.com- a personal finance site. That means your monthly payment could jump to $1- 334.”
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Second Mortgages Can Cap Housing Costs
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Brenner goes on to recommend that- “If you have an adjustable rate mortgage that’s due to adjust this year or in 2007- consider refinancing. Taking out a new loan with different terms and paying off the old one can save you money. Refinancing does not make sense for everyone- however. If you intend to move in a year or two- for example- you may not save enough to recoup the costs of refinancing—usually about 1.5% to 2% of the loan.

“If you plan to stay in your house 10 years or longer- a fixed-rate mortgage is worth the extra cost to avoid rate increases. A hybrid ARM is a little less expensive- but you are vulnerable to future rate hikes- so look for one whose fixed rate lasts as long as you expect to stay in the house.”

Benefits of Fixed-Rate Second Mortgages
Fixed-rate second mortgages can be less expensive than refinancing first mortgages. They usually have lower annual percentage rates (APR) than other forms of borrowing and they can save on taxes because the interest on mortgages is deductible. Second mortgages are also easier to get than unsecured loans or lines of credit.
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Like a first mortgage- a second mortgage payment consists of principal and interest. Unlike a first mortgage- nothing is put into escrow to cover expenses such as homeowner insurance- property taxes and Private Mortgage Insurance.

Applying for a second mortgage is often faster than refinancing a first mortgage and requires a lot les paperwork. It’s safe and secure to apply online from the convenience of your own home.

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Mortgages are products- just like automobiles or new living room furniture—just a whole lot more expensive. A home is often the largest financial transaction people ever undertake. Before signing the loan papers- get information from several lenders. Compare all the important information such as interest rates- discount points- closing costs- legal fees- title and insurance- etc.

If you have bad credit- you will be charged a higher interest rate- but according to The Equal Credit Opportunity Act- you cannot be denied a loan on the basis of race- color- religion- national origin- sex- marital status or age.

To get current rates on mortgage refinancing- visit Easy Second Mortgages. For a competitive second mortgage quote- check out Easy Mortgage Refinancing.


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