Mortgage rates are changing - what should you do?
There was big news within the mortgage industry recently as interest rates finally went back below 6%. The reaction was mixed, but the rate did prompt many people to rush to refinance their homes. For those that are stuck with variable rate mortgages, the current situation in the housing market has been volatile to say the least and many consumer advocates have been pushing the need to refinance if at all possible.
This has not been easy for many, especially since interest rates were quite high until this week. Every small drop helps however and the current resurgence for refinances could help bolster the struggling housing market. While much damage has been done, there is still light at the end of the tunnel, despite the decision to take over Freddie Mac and Fannie Mae, two of the US’s biggest lenders.
While there is hope for some borrowers, those in a subprime position may not find it easy to refinance their homes, in spite of the drop in rates. Banks are shying away from this sub-set of borrowers and the specter of foreclosure still looms for many. For those that are unable to refinance, there are steps that can be taken to avoid foreclosure, but they must be taken quickly.
The first step is to determine how to free up enough cash to handle increased mortgage payments. For those that did not plan ahead for a switch to a variable rate, the shock of a much higher payment was a rude awakening. Although thousands knew that their fixed rates were only short term, there was a general lack of awareness of how this would affect them personally.
If you have been switched to a variable rate mortgage and are struggling to make your payments, foreclosure does not need to be the first option. In many cases, the difference in payments can be as small as $50, or as high as several hundred dollars. For those that are living above their means, simply curtailing some additional expenses can free up the funds necessary to make those higher payments.
Other options include getting a second job on a temporary basis until the rates do drop to a point where payments become livable again. For those that do not have the time for this option, selling a car, or other household items may be the best solution.
Today’s news was heartening to many and does show that rates may be on the way back down, at least temporarily. If you can get a refinance plan on a home loan, taking action now may be beneficial. If you cannot seek this type of assistance however there still are plenty of other options available that can help you keep your home, until the economic outlook brightens again. Housing changes and rate fluctuations are normal, and riding out the storm is typically the best solution.
Photo Credits: 1
Originally posted 2008-10-07 05:12:06. Republished by Blog Post Promoter
Related Articles -
How Do Savings Bonds Work? /caption] Savings bonds are a major offering in credit unions and at banks. It is important to know what savings bonds are all about so that you can understand whether or not they will benefit you in any way. This page is going to take you through some of the...... -
Breaking Down Budgeting A personal budget is simply a spending plan. Before you work on personal budget planning you need to have a good idea of where and how your money is being spent. It can be a tedious process, but it can also be a true eye opener if you are not...... -
Prepare for Your Retirement Now /caption] If you are young and just beginning a career, then the concept of retirement planning may seem so far away that it is the last thing that you put any consideration into. However if you are on the opposite end of the fence and retirement is just around the...... -
How to Fix a Mistake On Your Credit Report /caption] We all make mistakes, but when it comes to your credit report, a simple or small error can have a big impact. In fact, one small error is more than enough to drag down your FICO score and could even prevent you from getting a loan in the future....... -
Tips for Managing Your Money Wisely With a few tips for managing money wisely, you should have no problems putting together a good working budget and learning how to manage your money. Here are some excellent tips for managing money wisely that will give you a great platform for getting started. /caption] 1 - The first......
Related Sites -
Weak Ways to Pay Off Debt The following is a sponsored guest post by Jeremy Cabral. Jeremy writes for Credit Card Finder an Australian credit card comparison site that helps you compare no annual fee and balance transfer credit cards. See here for additional information about guest posts.When you are faced with any sort of debt,...... -
Closing on our mortgage refinance We'll be closing our refinance soon and I'm looking forward to getting that done. Our interest rate will be reduced by 1%, and our loan term will be reduced to 15 years from 20. (Although we still intend to have the mortgage paid off much, much sooner than that.) This...... - Increasing Your Mortgage Payment I wrote previously about how accelerated bi-weekly mortgage payments can pay your mortgage off sooner. In that post I used this example, if you have a $200,000 mortgage, amortized for 25 years @ 5%, and bi-weekly accelerated payments, you would pay $124,095 in interest and will have the mortgage paid......
-
Mortgage Payoff - We Pulled the Trigger The mortgage is dead. We killed it. If you have been reading Mr. ToughMoneyLove for a while (thank-you BTW), you know that we have been planning on paying off one of our mortgages. (We own two homes, one of which we use now as a vacation home and later, as a...... -
Obama's $275 Billion Housing Crisis Plan President Obama announced a $275 billion plan that would help homeowners, as many as 9 million, refinance or re-negotiate their home loans. Said President Obama "This plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild...It will prevent......