| Home equity loan avoids fees of refinancing mortgage
Q. I would like to refinance my adjustable-rate mortgage to lock in one of today's low rates. But I don't want to pay a lot of fees for a new mortgage that would actually make my monthly payments bigger over the next year. Refinancing would cost thousands, which seems like an awful lot for a loan of only about $80,000. What should I do? A. You might consider a home equity loan instead of an ordinary mortgage. Many home equity loans are unusually attractive now. Yours is a dilemma that confronts many homeowners with adjustable mortgages, or ARMs: They may be happy with the low interest rates they're paying today - in many cases only 4 percent or so - but they worry their rates will rise in the future. It would be nice to lock into a low fixed rate, but refinancing fees can total thousands.
Countrywide Posts $421 Million Q4 Loss
Late payments also rose on traditional mortgages and home equity loans.
'While considerably improved from the previous quarter, (results) were adversely impacted by further credit deterioration across the industry and continued illiquidity in the secondary mortgage markets,' Chief Executive Angelo Mozilo said in a statement.
Countrywide wrote down $831 million largely related to prime home equity loans. It set aside $907 million for credit losses, up from $70.8 million a year earlier. Restructuring charges totaled $87 million.
For all of 2007, Countrywide lost $704 million, or $2.03 per share.
Bank of America, the second-largest U.S. bank, on Jan. 11 agreed to buy Countrywide in a transaction that on Monday valued the mortgage lender at about $4.3 billion.
Housing: Florida's Primary Concern
At times, its job growth rate was double the pace for the rest of the U.S. That led to one of the lowest rates of unemployment in the country. But now, headed into the closely-contested Jan. 29 Republican primary, dark clouds have gathered over the Sunshine State. "Housing-related employment was 14% of the state's total employment, compared with a national average of 10.6%," says Chris Lafakis, an economist at Moody's (MCO) Economy.com, in Westchester, Pa., who closely follows regional economies. "The entire state of Florida is at serious risk of recession, if it isn't already in one." Home-Equity Driven Spending Dries Up In the boom years, Florida became a haven for mortgage refinancing: In recent years, according to Economy.com, 15% of consumer spending in Florida was fueled by home-equity loans, refinancings, and home-sale income, compared with 9% nationally.
Second Mortgages Explained In Simple Terms
With the many loan choices around at the moment, you in all probability want to know how second mortgage loans stack up. This report presents many great ideas and constructive hints as it relates to why using a second mortgage is the latest method to search out some much wanted cash. When you apply for a second loan, your home is used for collateral to provide security to the lender. Second mortgage equity loans are arranged to provide lump sums of money to the homebuyer, which you repay on a specific contract. The money could then be utilized for most any reason; though, it is recommended to wipe out debts, as opposed to spending mindlessly. The loans could be applied to pay off tuition, which is a great idea, given that the loans for college tuition could lead to problems.
|
