Over the past few years, the housing market in the U.S. has boomed. As a matter of fact homeowners have watched their home equity balloon as housing prices have soared. It is worth mentioning in this regard that in many areas in the U.S., modest homes purchased as recently as seven years ago have doubled or tripled in value.
On the other hand, during that same period, interest rates dipped dramatically, allowing a homeowner to obtain a mortgage refinance quote. Theoretically speaking, in refinancing, homeowners lowered monthly payments and often withdrew a portion of their home equity - via home equity loans and home equity lines of credit - to make purchases or pay down consumer debt with higher interest rates.
According to experts, in a speech given in October 2004, Federal Reserve Chairman Alan Greenspan said, "Despite average annual mortgage debt growth in excess of 12 percent over the past two years, the financial obligations of homeowners have exhibited little change as a share of their income because mortgage rates have remained at historically low levels. It is worth pointing that the enormous wave of mortgage refinancing, which ended only in the fall of 2003, allowed homeowners both to take advantage of lower rates to reduce their monthly payments and, in many cases, to extract some of the built-up equity in their homes. Moreover, in the aggregate, the cash flows associated with these two effects seem to have roughly offset each other, leaving the financial obligations ratio little changed."
Greenspan further added, saying, "Indeed, the surge in cash-out mortgage refinancings likely improved rather than worsened the financial condition of the average homeowner. It is worth noting that some of the equity extracted through mortgage refinancing was used to pay down more-expensive, non-tax-deductible consumer debt or to make purchases that would otherwise have been financed by more-expensive and less tax-favored credit."
If the report of Federal Deposit Insurance Corporation (FDIC) is taken into account, historically low mortgage rates caused record numbers of homeowners to obtain a mortgage refinance quote and to sign on the dotted line to refinance their mortgages at lower rates. Theoretically speaking, in a recent report, the FDIC said, "As mortgage rates bottomed out, refinancing volumes peaked in June 2003, but they have fallen sharply since then...Indeed, the Mortgage Bankers Association recently forecast that the dollar volume of refinancings would decline 57 percent in 2004 from a record $2.5 trillion in 2003."
If experts are to be believed, more homeowners are seeking a mortgage refinance quote to obtain a home equity line of credit (HELOC). Again coming to the FDIC, these lines of credit have grown about 30 percent annually. The FDIC report clearly emphasizes, "The rationale for homeowners' greater use of HELOCs is straightforward. It is worth mentioning in this regard that with consumer spending outpacing income growth in the 2000s, homeowners have turned increasingly to home equity lending as a substitute for consumer credit to finance new consumption, reduce outstanding debt, or purchase a home in a two-loan package deal. Theoretically speaking, the appeal over other more costly credit alternatives derives from the significant advantages of comparatively low interest rates, tax deductibility, and easy availability, since income and cash flow tests matter less for determining credit lines than for credit cards or auto loans.
In addition, because HELOCs offer the flexibility to draw money only as needed and the convenience of a revolving credit line, borrowers favor HELOCs more and more over closed-end home equity loans. As a matter of fact for these reasons, many homeowners are converting the equity in their home into cash through home equity borrowing and making this kind of transaction an increasingly important part of their household finances. Furthermore, with the dramatic decline in mortgage refinancing volumes since mid-2003, a homeowner would more likely choose to tap home equity through a draw on a HELOC rather than extract cash as part of a refinancing."
It is worth pointing that obtaining a mortgage refinance quote is the first step in obtaining a home equity line of credit that homeowners can use for home improvement, debt consolidation, or consumer spending.
If experts are to be believed, deciding to consider refinancing of mortgage for home loan is a major determination. Next key issue involved is to search ways to get profitable quotes for mortgage from banks. It is worth pointing that a thorough research of prevailing market rates is essential to obtain competitive quote from mortgage firms. On the other hand, being familiar with current trends enables one stand a better chance of bargaining for lower interest charges. Always remember that mortgage rates usually increase or decrease in accordance with securities in Wall Street. Thats why, a careful overview of market trends helps one save considerably on interests.
In theory, comparing different loan schemes from a particular mortgage vendor and also form different vendors would facilitate one to choose the most profitable scheme.
Few of the major tools available in market for evaluating dissimilar loans programs is the Annual Percentage Rate (APR). It is worth mentioning in this regard that laws of the state make it mandatory to expressively disclose APR while marketing their mortgage rates. Always remember that this is for the benefit of borrower and to prevent them from falling prey to lower advertised rates, and find out if there are any hidden fees and upfront costs involved later.
According to experts, personal meeting with lenders, bank officials and mortgage professionals help in getting a competitive interest quote for your loan. On the other hand, being well prepared with entire documentary evidence in support of your financial situation before meeting the people at bank enhances chances of receiving lower interests. Furthermore, presenting documents to support your favorable credit history would tempt bank managers to provide you with lucrative mortgage quotes. Papers mandatory to obtain fast and lucrative loans rates include:
Proof of employment status and proof of income sources.
» Previous paid credit card bills and other similar statements to show history of genuine payments in past.
» Purchase contract of the house if it is available.
On the other hand, during that same period, interest rates dipped dramatically, allowing a homeowner to obtain a mortgage refinance quote. Theoretically speaking, in refinancing, homeowners lowered monthly payments and often withdrew a portion of their home equity - via home equity loans and home equity lines of credit - to make purchases or pay down consumer debt with higher interest rates.
According to experts, in a speech given in October 2004, Federal Reserve Chairman Alan Greenspan said, "Despite average annual mortgage debt growth in excess of 12 percent over the past two years, the financial obligations of homeowners have exhibited little change as a share of their income because mortgage rates have remained at historically low levels. It is worth pointing that the enormous wave of mortgage refinancing, which ended only in the fall of 2003, allowed homeowners both to take advantage of lower rates to reduce their monthly payments and, in many cases, to extract some of the built-up equity in their homes. Moreover, in the aggregate, the cash flows associated with these two effects seem to have roughly offset each other, leaving the financial obligations ratio little changed."
Greenspan further added, saying, "Indeed, the surge in cash-out mortgage refinancings likely improved rather than worsened the financial condition of the average homeowner. It is worth noting that some of the equity extracted through mortgage refinancing was used to pay down more-expensive, non-tax-deductible consumer debt or to make purchases that would otherwise have been financed by more-expensive and less tax-favored credit."
If the report of Federal Deposit Insurance Corporation (FDIC) is taken into account, historically low mortgage rates caused record numbers of homeowners to obtain a mortgage refinance quote and to sign on the dotted line to refinance their mortgages at lower rates. Theoretically speaking, in a recent report, the FDIC said, "As mortgage rates bottomed out, refinancing volumes peaked in June 2003, but they have fallen sharply since then...Indeed, the Mortgage Bankers Association recently forecast that the dollar volume of refinancings would decline 57 percent in 2004 from a record $2.5 trillion in 2003."
If experts are to be believed, more homeowners are seeking a mortgage refinance quote to obtain a home equity line of credit (HELOC). Again coming to the FDIC, these lines of credit have grown about 30 percent annually. The FDIC report clearly emphasizes, "The rationale for homeowners' greater use of HELOCs is straightforward. It is worth mentioning in this regard that with consumer spending outpacing income growth in the 2000s, homeowners have turned increasingly to home equity lending as a substitute for consumer credit to finance new consumption, reduce outstanding debt, or purchase a home in a two-loan package deal. Theoretically speaking, the appeal over other more costly credit alternatives derives from the significant advantages of comparatively low interest rates, tax deductibility, and easy availability, since income and cash flow tests matter less for determining credit lines than for credit cards or auto loans.
In addition, because HELOCs offer the flexibility to draw money only as needed and the convenience of a revolving credit line, borrowers favor HELOCs more and more over closed-end home equity loans. As a matter of fact for these reasons, many homeowners are converting the equity in their home into cash through home equity borrowing and making this kind of transaction an increasingly important part of their household finances. Furthermore, with the dramatic decline in mortgage refinancing volumes since mid-2003, a homeowner would more likely choose to tap home equity through a draw on a HELOC rather than extract cash as part of a refinancing."
It is worth pointing that obtaining a mortgage refinance quote is the first step in obtaining a home equity line of credit that homeowners can use for home improvement, debt consolidation, or consumer spending.
If experts are to be believed, deciding to consider refinancing of mortgage for home loan is a major determination. Next key issue involved is to search ways to get profitable quotes for mortgage from banks. It is worth pointing that a thorough research of prevailing market rates is essential to obtain competitive quote from mortgage firms. On the other hand, being familiar with current trends enables one stand a better chance of bargaining for lower interest charges. Always remember that mortgage rates usually increase or decrease in accordance with securities in Wall Street. Thats why, a careful overview of market trends helps one save considerably on interests.
In theory, comparing different loan schemes from a particular mortgage vendor and also form different vendors would facilitate one to choose the most profitable scheme.
Few of the major tools available in market for evaluating dissimilar loans programs is the Annual Percentage Rate (APR). It is worth mentioning in this regard that laws of the state make it mandatory to expressively disclose APR while marketing their mortgage rates. Always remember that this is for the benefit of borrower and to prevent them from falling prey to lower advertised rates, and find out if there are any hidden fees and upfront costs involved later.
According to experts, personal meeting with lenders, bank officials and mortgage professionals help in getting a competitive interest quote for your loan. On the other hand, being well prepared with entire documentary evidence in support of your financial situation before meeting the people at bank enhances chances of receiving lower interests. Furthermore, presenting documents to support your favorable credit history would tempt bank managers to provide you with lucrative mortgage quotes. Papers mandatory to obtain fast and lucrative loans rates include:
Proof of employment status and proof of income sources.
» Previous paid credit card bills and other similar statements to show history of genuine payments in past.
» Purchase contract of the house if it is available.
