Americans Are Freeing Up Funds With A Home Equity Loan

Sales of new homes jumped to a record high in July, up 6.5 percent from June, the Commerce Department said on Wednesday. Refinancings last week increased as a percentage of all mortgage applications, up to 43.7 percent from 42.4 percent, the MBA said.

Home owners are looking at ways to free up funds by refinancing or opting for home equity loans. For example, a $200,000 home with a $125,000 mortgage has $75,000 in equity.

Home Refinancing AlternativesNow using a mortgage payment calculation tool compare mortgage payments at current rates with he mortgage rates in the chart. Significant savings? If so, you see the value of opting for home loan refinancing.

Cash Out Refinancing Program.This not only frees up funds per month but also puts immediate cash in hand for other purposes such as investing in stocks and bonds or pursuing a business venture or some other income generating pursuit.

Mortgage Market Snapshot
Daily Mortgage Averages Updated: 8/25/2005
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PRODUCT RATE POINTS APR CHANGE
30 Year Fixed 5.46% 0.52 5.57% 0.000%
15 Year Fixed 5.04% 0.56 5.25% 0.000%
30 Year Fixed Jumbo 5.73% 0.63 5.84% 0.000%
15 Year Fixed Jumbo 5.29% 0.61 5.48% 0.000%
5 Year Balloon 5.36% 0.84 5.94% 0.000%
7 Year Balloon 5.55% 0.61 5.94% 0.000%
1/1 ARM 4.45% 0.64 6.25% 0.030%
3/1 ARM 4.78% 0.63 5.91% 0.010%
5/1 ARM 4.98% 0.59 5.79% -0.030%
1/1 Jumbo ARM 4.20% 0.87 6.28% 0.010%
3/1 Jumbo ARM 4.92% 0.75 6.02% 0.000%
5/1 Jumbo ARM 5.12% 0.66 5.98% 0.000%
FHA 30 Year Fixed 5.34% 0.52 5.45% -0.010%
FHA 1 Yr ARM 4.46% 0.60 6.39% 0.000%
VA 30 Year Fixed 5.43% 0.43 5.53% -0.010%

FHLMC 5.56% 5.59%
Fannie Mae 5.67% 5.71%

A Brief History Of Mortgage Rates

Did you know that lenders have been charging interest on loans for over 34 centuries.? A biblical reference reveals when and to whom interest was to be charged according to the Mosaic Law. Still the question is how much interest was charged? Was there a fluctuation in interest levels? Are ancient interest rates comparible to our day?

A mortgage rates shopping resource reports "the Greeks interest rate was sustained between 10 percent to 12 percent." So there were regular periods of fluctuation although they managed to keep their rates fluctuating to far above the 12.00 percentile. The report reveals that the Romans’ carried rates that fluctuated from 4 percent to 50 percent, depending on where in society men lived." These astonishing reports indicate that rates have been fluctuating from ancient times up to the 21st century. And the interest rates of the ancients at one time or another were comparible to todays rates.

So is there a lesson in all of this? Yes. Rates may rise and rates may fall but interest rates will always be.

Home Refinancing A Good Investment Strategy

With a wide selection of high yeild investment strategies now available it may be hard to believe there may be an investment opportunity sitting in your front yard.

Borrowers have yet another chance to lock in low long term rates as 30-year fixed mortgages are once again below 6.00% or convert out of variable rate loans, especially those loans indexed to the Prime Rate which now stands at 6.00%.

The objective is to lower your rates and reduce mortgage payments in order to free up funds to invest in high yield accounts. Once way to do this is consideringlowering your rates on home financing be opting to refinance your home loan.

Rates on 15-year,fixed-rate mortgages, a popular choice for refinancing a mortgage are still holding steady well below the 6 percent threshold. It's easy to see where the savings comes in if your current rates are 6.50% or higher. 

Home Loan Refinancing Rates Keep Dropping.

Home loan refinancing at lowest cost available now as rates have dropped.
The Fed chairman says The economy is on "reasonably firm footing" and isn't fanning worrisome inflation. Rates on 30-year mortgages fell again this week, dropping to the lowest point since the spring of 2004, according to a nationwide survey.

Still there is concern of the potential housing bubble and the economic fallout from spurting oil prices. The White House is predicting a slightly less optimistic forecast for the country's economic growth but sees an increase in new jobs.

Rates on 30-year mortgages have hit their lowest level in four months after falling for the eighth time in the past nine weeks. Low interest rates and rising incomes have made houses more affordable than they were 10 years ago. This downward trend that has helped push sales of both new and existing homes to record levels. For more home refinancing news go to http://bcpl.net/~ibcnet

Home refinancing over the past four years have saved consumers tens of thousands of dollars in home loan costs. Home refinancing may account for the increase in major spending in the auto industry, stock investments and improved education funding in the household. Finding the right refinance deal has improved dramatically over the past five years with the help of the Internet. Now refinance deal shoppers need only look at their screens to find out who offers the best rates. Cost comparison online has become the norm for web savvy shoppers. Why not home loan refinance shoppers?

Those looking for a great rate have not been disappointed. Rates have plunged for the past eight straight weeks and it doesn't look to be rising any time soon. That said consumers realizing great savings when lowering mortgage payments.

Are Rates Dipping Or Rising?

"Mortgage Rates Dip Deep"
"Adjusting to rising mortgage rates now reality"
"30-year mortgages fall for 6th week"
"Treasury bill auction sees three-year high on interest rates"
"Mortgage Rates Steady And Low"
"Home Refinance Rates Dip"

Looking at these headlines can make the mind reel for consumers trying to get a fix on where rates are and where there going. The articles themselves identify the rates being discussed. These could be short term rates or long term rates. Adjustable or fixed.

When hearing that rates are rising homeowners who failed to refinance their mortgages in the last year or two probably figure they missed the boat. Reports of rates rising have slowed refinancing compared to the wave seen in 2003 and parts of 2004. What many homeowners don't know is that the boat has apparently come back to the dock. How so?

Months ago economists projected that the interest rates which mortgage rates are tied to, would increase to more than 7 percent once Lender tack on the spread. To the contrary we're seeing rate levels at 5.35 to 5.6 percent on 30-year mortgages and around 5 percent, or even a little lower, on 15-year mortgages.This may be a surprise to some consumers who assume that rates have been rising in tandem with short-term loan rates, which the Federal Reserve Board has been pushing higher since last fall.

While rates are going up on short-term loans and home equity lines - long term mortgage rates are as low as ever.

Tip: Low rates may not last much longer. Real estate market is in its seasonal lull and stronger demand in the spring usually helps push rates higher. If you must get financing for spring and summer projects do it now.

Should I Pay Down My Mortgage Or Refinance?

Giving careful thought to paying down your mortgage is crucial to retaining your home, seeing a return on investments and financial survival. Whether you should or shouldn't is another story. There are some key factors to consider.

It goes with out saying that not paying down your mortgage would leave you with a larger debt burden over time. The issue is whether to take retain this debt or not. Still when refinancing aren't you taking on more debt?

it's not a matter of taking on more debt. Once the mortgage exists, the question then becomes whether we can pay it off early and save or reduce the overall amount of the loan by refinancing and save.

Would paying off the mortgage at a more rapid rate reduce your debt burden? Perhaps, but can you afford to make extra payments to accomplish this? If money is scarce than the alternative might be lowering the rate by refinancing first and then paying down the mortgage debt.

Once the mortgage rate is reduced commense paying down at a more rapid rate. Use the extra funds saved to improve your investment portfolio.

Rising Rates Seen Cutting Home Sales Record

While home purchasing, home refinancing and equity loans were at modest levels, home sales across the nation reached record setting levels in 2004. But rising interest rates will result in fewer new mortgages and fewer homes sold in 2005.



How will this impact loan application figures? According to Interest.com a national mortgage group predicted that loan originations and sales will still remain near record highs. That said home owners will still be rushing into the market for low rate refinancing products in an effort to lower mortgage interest rates, reduce monthly mortgage payments and save if possible thousands of dollars over the life of the loan.



The tempting factor is the offer to take on a cash out refinancing loan. Cashing in can put the borrower in a better financial position so long as some of the funds are invested in a program that results in a good stead return.