Mortgage second » Interest Rates

Mortgage Rates – What Drives Them?

admin — Sat, 05 Jun 2010 18:16:33 +0000

The question I get asked the most in regards to Massachusetts Mortgage Rates, is what drives them. My clients are amazed that it is not the fed. When the Fed makes a move, they can change a rate called the “Fed Funds Rate” or “Discount Rate”. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed changes. This is due to the dynamics within the financial markets in response to inflation.

Massachusetts Mortgage rated are actually driven by Bonds, when the market is buying bonds they are helping drive the 30 year mortgage lower. It’s a double edge sword for many people; they want the stock market to due well, but they want interest rates to drop. However, most of the time when thee Dow is going up so are interest rates. And when it is going down interest rates improve.

So the next time you are looking for mortgage in Massachusetts make sure your mortgage person actually knows what drives rates, and how it all works. If they cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday, but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future?

By: Christopher Hills

The Facts About Second Mortgages

admin — Sun, 03 Jan 2010 03:21:05 +0000

Your home: It’s probably your biggest asset. Having a home to back you up when you need a loan is one of the greatest advantages of home ownership. In recent years, there has been a major increase in the amount of people looking to use their homes as a way to get access to extra money when they need it most. One of the best ways to do this is through a second mortgage.

A second mortgage is exactly what it says it is – a loan made in addition to your first mortgage, and it’s based on the amount of equity you have built into your home. Many people use them to fund home renovations, to pay off credit cards, or to put a child through college. Since you’ve already been through the process once, the underwriting required to get a second mortgage is much simpler than it was the first time around, and the cost of the transactions involved will be significantly lower. This usually makes up for the fact that interest rates on the second mortgage are a bit higher than they were on the first one.

On a second mortgage, you will borrow a fixed sum of money against your home equity, and pay it back over a specified amount of time. The amount you borrow will be combined with the amount you still owe on your first mortgage.

It all sounds pretty simple. There are just a few things to keep in mind. First of all, don’t take out a second mortgage on your home unless you’ve built up a fair amount of equity in the property already- that is, made payments on the original mortgage balance for a good amount of time. You may still be able to get a second mortgage if you don’t have much equity, but your rates will be so much higher, and the amount you can borrow so much lower, that it will essentially be a waste of your time and money. This is one of those things that is worth waiting for.

Also, look into the other options of borrowing against the equity of your home, including a home equity loan and a home equity line of credit. All of these options allow you to borrow against your equity, but there are slight variations among them that mean one of the three may be the best option for you. It will depend, for the most part, on your particular financial standing, the amount of money you need to borrow, and the amount of home equity you currently have.

By: Joseph Kenny

Second Mortgage Loans After Bankruptcy

admin — Tue, 22 Dec 2009 18:34:47 +0000

The purpose of bankruptcy is to give the debtor a new start in his life by repaying creditors in a systematic way. Thus, bankruptcy does not prevent anybody from taking a loan. Today, the lending rules are becoming much more relaxed, and you should not worry that you have lost your dream to buy a home or acquire a property even after you have gone bankrupt.

A second mortgage after bankruptcy requires at least two years waiting on part of the borrower. He should also pay all the bills on time during this period and save for the down payment amount, if possible. One fact that you have to keep in mind is that you may not qualify for the best interest rates, but your determined efforts to re-establish your credit could convince the creditor. A large down payment might impress the lender, and he may offer a lower interest rate. PMI is the other factor that would be involved, due to the poor credit history. Avoid mortgages with two to three years of prepayment penalties. Remember, the rates on mortgage after insolvency may be up to 12 times higher than that of the regular mortgage.

If you plan to get a mortgage within two years of bankruptcy discharge, you have to provide evidence for the flawless on-time payments you have made since your bankruptcy. But after the two-year waiting period, it is easy to get a mortgage with a small down payment, and you may even qualify for a 100% mortgage.

By: Max Bellamy

Second Mortgages: What you Need to Know

admin — Mon, 07 Dec 2009 18:01:19 +0000

At times in life it may be necessary to come up with a sum of cash for unexpected expenses or even expenses that you might not be able to afford without a influx of cash. In these cases a second mortgage can come in quite handy. Before taking out a second mortgage; however, you should know how they work and the advantages and disadvantages of second mortgages.

Basically a second mortgage occurs when you take out another mortgage on top of the existing mortgage on your home. This type of loan is secured with the property for collateral. Of course, the first mortgage takes precedence in the event that you default on the loan. Any funds that are left would then be applied to the second mortgage.

Many people commonly use second mortgages for such expenses as home improvements, the purchase of a second or vacation home and to consolidate other debts with a lower interest rate. Of course, you may also be able to use the proceeds of your second mortgage for other options but you should always keep in mind that you are putting your home at risk for the purchase and be sure you can justify the risk for that purpose.

One of the major disadvantages of a second mortgage is that the interest rate will usually be higher than your first mortgage. Lenders insist on higher interest rates because they understand they won’t be the first in line in the event that you default on the loan and they need to protect their assets, so they do this with higher interest rates. Of course, the rates are typically lower than what you could obtain with any other type of loan and much lower than credit cards.

You should also be aware that you’ll typically be responsible for some fairly significant closing costs on second mortgages. If you can’t pay those fees, you may not be able to work out a second mortgage on your property.

Due to the amount of risk involved you need to be absolutely sure you have no other option before taking out such a loan. After all, you are risking the loss of your home, so you should be sure you’re willing to take the risk as well as be relatively sure you can cover the additional loan payments.

If you do decide a second mortgage is the right option for you, be sure to shop around for rates before taking the first one offered to you. You may be able to get better terms or a lower interest rate by shopping around.

Always look over the terms to be sure of what you’re agreeing to pay. One of the most typical arrangements with many second mortgage lenders is to tie what is known as voluntary insurance in with your mortgage. Depending on the level of your current insurance policy, you may not need this additional coverage and cost. In addition, always make sure you know how much you’re paying for closing costs, such as application fees, points to get a lower interest rate and appraisal fees.

By: Joseph Kenny

What Is A Second Mortgage?

admin — Fri, 04 Dec 2009 12:46:42 +0000

A second mortgage is a loan that is secured by the equity in your home. When you obtain a second mortgage loan the lender will place a lien on your house. This lien will be recorded in 2nd position after your primary or 1st mortgage lender’s lien, hence the term second mortgage.

A second mortgage is also sometimes referred to as a home equity loan. There is no difference between a home equity loan and a second mortgage. These are just two different terms for the same subject.

A second mortgage can either be a fixed-rate loan or an adjustable-rate credit line. Interest rates and loan program terms will vary from lender to lender so it is important to shop around and compare before committing to any one offer.

Loan proceeds from a second mortgage loan can be used for just about anything. Many consumers take out 2nd mortgage loans to consolidate debt, do home improvements or pay for their kids college education. Whatever you decide to do with your loan proceeds it is important to remember that if you default on your payment you can lose your home so you will want to make sure that you are taking the loan out for a worthwhile purpose.

Another plus of a second mortgage loan is that the interest you pay back on the loan may be tax deductible. Consult your tax advisor regarding your personal situation but in most cases the interest is 100% fully deductible as long as the combined loan to value of your 1st and 2nd mortgage do not exceed the value of your home.

For more information on second mortgage loans, or to compare rates and programs of second mortgage loan lenders visit http://www.equityloansource.com

By: Levetta Rivera

Helpful Tips On How To Refinance A Second Mortgage

admin — Thu, 26 Nov 2009 00:47:46 +0000

Today, home refinance has been a hot area for lenders and homeowners alike. With much lower interest rates, it only makes sense to refinance a home mortgage that you’ve been paying on at 10% interest. These lower rates are also ideal for many to refinance a second mortgage. Here are some tips and things to consider with a second mortgage refinance.

Why Consider Refinancing a Second Mortgage?

Of course, getting a lower interest rate is a big part of it, but there is another important reason as well. You will find that in most instances you can refinance your second mortgage for the same monthly payment you currently have, but for a much shorter loan period.

Getting a 10 year second mortgage for what you were paying on a 15 year loan makes good financial sense. Refinancing a high interest rate second mortgage will save you a lot of money over time.

One of the keys in to successfully refinance a second mortgage is finding the right lender or mortgage broker. Look for a lender that will take the time to explain all the details to you. This is in addition to finding a lower interest rate and much more favorable loan terms.

Finally, know upfront what you can expect in refinance closing costs. The last thing you want at your loan closing is a huge surprise in unexpected fees or costs. A good lender will go over all costs with you before closing. And if they don’t, start looking for a new one.

You can find lenders who specialize in second mortgage refinancing online at many different websites. You’ll also be able to find out much more information about any potential lender so you can know that you are making your best decision.

By: Terry Edwards