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 -
Is Leasing an Auto a Good Option Right Now? [/caption] With the current state of the economy and rising interest rates, many are considering leasing an auto instead of making an outright purchase or financing one. While there are a few benefits that can come through a leased vehicle, this is a decision that will require some careful thought...... -
The Danger of Auto Bill Pay As our society gets busier, it’s been increasingly important to automate several aspects of our lives. One of the first areas to be automated was the payment of monthly bills and for many, this is an essential system that helps them avoid late payments. However, there are a few dangers...... -
Online Finance Magazines [/caption] Most people intentionally bypass the bay of finance magazines in the grocer or their local newsstand, believing that there is nothing in those magazines that will help them gain a better understanding of their money, the state of the economy, or anything else relating to finances for that matter....... -
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...... -
3 Ways to Increase Your Cash Flow If you’re finding it difficult to get by, one of the easiest ways to combat this issue is by increasing your monthly cash flow. While you may not be able to make a huge difference right away, slowly building up the amount of money that you have coming in, building......
Related Sites -
Retirement savings vs. accelerated mortgage payments FreeMoneyFinance.com had a post today about an Ask the Experts article on CNN Money. The scenario: A couple in their late twenties, both are maxing out their employers' 401(k) match, and are paying down their mortgage with the extra money. The question: Is this good, or should they save for...... -
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,...... -
How to Get Back on Track with Your Mortgage Payments We all watched as the housing market took a terrible tumble along with the rest of the economy. It is not over with yet as there are still those who are losing their jobs and have no way to make their monthly mortgage payments. If you are a part of...... - Take Advantage Of Home Improvement Loans And Tips On Home Refinancing Adding a 3-automobile garage or stainless-steel appliances and granite countertops within the kitchen may appear a small amount self-indulgent. But transforming, upgrading appliances, or adding on to your home will doubtless add significant value and be a terribly wise investment. Thus you can fancy the luxuries whereas you’re living in......
- Mortgage Rate Roundup - July Edition. Mortgage rates are still near historic lows, but have edged up slightly over the past week or so. The 30 year fixed mortgage rate benchmark is up 4 basis points to just around 5.8%, but keep in mind that your lender will likely tack on a few more basis......