Second Mortgages Can Cap Housing Costs

Second Mortgages Can Cap Housing Costs



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 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.
Brenner goes on​ to​ recommend that,​ If you​ have an​ adjustable rate mortgage that’s due to​ adjust this year or​ in​ 2018,​ 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 .​
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.
Mortgages as​ Products
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 www.easysecondmortgages.com .​
For a​ competitive second mortgage quote,​ check out www.easymortgagerefinancing.com.




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