interst only loans sucker naive Nashvillians

An artilce in the Tennessean newspaper today sheds light on some naive people that are getting forked with interest only laons, a low payment is suckering people into a really bad deal. These loans apparently are good for lawyers and doctors and very bad for people who are not going to be making a lot more money than they currently are.

Here's a couple excerpts from the Tennessean today:

Consumer advocates say the loosened standards put more people at risk as loans originally designed for sophisticated people are marketed to far less savvy borrowers.

"They are still thinking of how it used to be, but it isn't like that anymore," said Allen Fishbein, director of housing and credit policy at the Consumer Federation of America.

Alternative mortgages were developed for a handful of people with promising long-term earnings potential such as young lawyers destined to make partner or doctors finishing medical school.

But as surging housing prices have outstripped wages in the most expensive markets, alternative financing has become popular.

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Most consumers don't do enough research on mortgages, said Christopher Cruise, who trains mortgage brokers at major lending companies.

"The American consumer's ignorance of mortgage procedures in the past hurt them a little," he said. "What's different now is that it'll hurt them a lot. The stakes are a lot higher."

Howard said he was persuaded to refinance his house by a "very friendly" loan officer who called weekly for a year.

He said he told the lender he would need help reading the paperwork at the closing, and still doesn't understand exactly what kind of mortgage he signed.

Howard's mortgage contains several of the new features, said Jim Sugarman, supervisory attorney at AARP's financial-abuse unit, who has reviewed the documents. It is an interest-only loan. The rate is fixed, but only for 10 years. Sugarman said Howard appears to have gotten a "NINA" loan, a "no-income, no assets" loan that required minimal income documentation.

"It's a very exotic mortgage, and he had no idea he was getting that," Sugarman said. "He thought he was doing something smart."

Many newer mortgages also make it difficult and costly for borrowers to get out. The mortgage bankers recently reported that more than 50 percent of some kinds of adjustable-rate loans contain prepayment penalties, which require borrowers to pay big bucks to break free. A prepayment penalty about 3 percent of the mortgage loan — about $9,000 on a $300,000 mortgage — is not unusual, according to the Federal Reserve.

If you got suckered into one of these loans, or a similar ballon adjustable - it's time to reconsider a refinance or consolidation loan and get to a fixed mortgage amount you can afford that will also help you pay off your house and earn some equity - rather than just paying interest in your home, which is like neverpaying off a credit card only to make a finance company rich and leave you with nothing of value after spending thousands!

check the mortgage company's license

When a refinancing your mortgage, be sure that the mortgage company that you're working with is licensed to do business in the state where your home is located. Mortgage companies have to be licensed to do business in your state. There are also some statewide local and nationwide mortgage associations that certify lenders who have met their specific criteria.

Large mortgage refinance companies such as countrywide are licensed in many if not all of the states in the USA. Countrywide posts information about its various licenses prominently on their website, some smaller companies you may have to inquire further to get their licensing information.

It is always a good idea to do a little research on the license of the mortgage company that you're working with especially if you're considering a disc count. Mortgage refinance company just because someone has a certificate on the wall doesn't mean that they have a valid license to do business with you. Before signing a bunch of legal paperwork having to do with your money and your home. Definitely research. The licenses of the company that you are considering doing business with.

Here is a link to the state of Michigan's.gov website which allows a quick and easy lookup of mortgage lenders licensed to do business in the state of Michigan. There are many resources on the Web and via telephone that you can use in each state to check up on the mortgage company that you are considering doing business with, as we verify more of these tools. We will post them as a static page for future reference.

We also reccomend a quick stroll through any pages indexed in Technorati for the particular company that you are considering. If for example you were considering a martgage refinance with Ameriquest mortgage, then I would definitley do a Technorati search for Ameriquest. You can modify the search there to include your state or local office, and see what people are saying in thier blogs about the company you are considering!

Treasury Rally Triggers Mortgage Refinancing

Bloomberg reports myDecember 2006:

U.S. Treasury Rally Triggers Mortgage Refinancing (Update2)

By Michael McDonald

Dec. 18 (Bloomberg) -- Homeowners may give the biggest Treasury rally in four years a boost as falling bond yields trigger a rush to refinance mortgages and increase demand for government debt.

Mortgage refinancing applications reached the highest level in a year this month as average rates on 30-year home loans fell to a 14-month low, according to the Mortgage Bankers Association. Demand for home loans helped push yields on 10-year Treasuries to 4.4 percent on Dec. 1, the lowest since January, because investors who own bonds backed by mortgages tend to buy government debt when they get their money back early.

Read the entire article at bloomberg for a lot of technical jargon related to the investment and securities tied in with mortgage monies.

mortgage insurance

When you refinance your home, he will have to recalculate your mortgage insurance. Many homeowners refinance their mortgage, not only to acquire a better interest rate, but many homeowners also get into mortgage refinance to take some of the equity out of their homes ,sometimes to consolidate other loans.

While you may be able to get a lower house payment by refinancing at a better interest rate taking some of the equity out of your home and consolidating loans may have the effect of raising your mortgage insurance rates. For example, if you were paying on a $200,000 house that you initially had 30,000, and equity your mortgage insurance may be set at a certain rate that could go up. If you're of a home has increased in value to say 250,000, and you take some of the equity out. Even though you could end up with a lower overall payments realize that you may be paying more in mortgage insurance.

It is always a good idea to do some calculations as to what your PMI or mortgage insurance rates will be depending upon how much you refinance with your new mortgage. One place to find a PMI or mortgage insurance calculator to get an idea of what you could expect stuff free tools located at forsalebyowner.com.

mortgage refinance involves many steps

There are many things to consider when refinancing a mortgage. Television commercials and refinancing companies make it seem like one phone call and you're on your way to extra money paid off bills and a better life.

When you refinance your mortgage you'll have to do with things such as a new appraisal on your home another check on the title and all the other things one into the original purchase; pretty much you are going to be looking at paying companies to reassess your home. You going to be looking at at redoing your insurance rates, and have to sign a bunch of paperwork and spend a good amount of time involved in the refinance process and basically closing on your house again.

We aim to explor each of these things in detail and culminate the best advice. We've been able to find ways of navigating to this jumble of refinancing a mortgage loan on your home.

Refinancing a mortgage ?

With so many Americans now refinancing thier mortgage I thought it would be clever to set up a blog about all the ways someone can refinanc thier mortgage and about the comapnies out there helping people with refinancing thier mortgage. There is so much information out there and most of the time the companies tell people what is in their best interest in not in the best interest of you the consumer so here I wanted to uncover everything about refinancing a mortgage to give people out there a better understanding of what they can do and should ask for when shopping around for refinancing of thier mortgage