Your Questions About Mortgage Rates News

Paul asks…

I currently have an adjustable rate mortgage loan and would like to set a fixed rate ?

I have heard on the news that we can petition our lender for a fixed rate. They also gave a phone number to a place called, Homeowners Unity Foundation whom I talked to, and they say they charge $2500.00 to help you because they work with lawyers that help the process move faster. But they do not guarantee results. Can anyone give me some insight or suggestions?

admin answers:

Stay away from this HUF outfit. Sounds like a rip off.

Read your mortgage documents. Some have a clause that you can convert for a fee (usually 1%). If so, contact the lender and ask what you need to do to accomplish this.

If you don’t have this clause, you can still ask them to convert it. There may be more fees as it will actually be a refinance.

Richard asks…

Is it really possible to pay off my 30-year fixed rate mortgage in 5-7 years?

I saw a so-called expert on a news broadcast this morning who said people in Australia and Europe have discovered a way to leverage their debt and finances in order to pay off their home mortgages at a faster rate without changing their monthly payments. How is this possible? It was quickly suggested that a Home Equity Line of Credit (HELOC) was the secret, but what does getting more debt have to do with eliminating debt?

admin answers:

Yes, it’s possible. But it may not be advisable.

A HELOC is the secret. Without getting into the details, you’re not borrowing more money. You’re using the HELOC like a checking account, shifting money (from your paycheck into it), then paying the mortgage out of it. And the sophisticated software that you pay for also tells you when to make additional contributions.

The systems I’ve seen cost something like $3,500. The argument is that you’ll save that much in interest in the first year. And maybe you will. But it is expensive up front. The only real requirement (other than perhaps your ability to obtain a HELOC in today’s credit environment) is that you have a monthly positive cash flow…that your income is exceeding your expenses. The numbers don’t work if you’re going into debt every month.

You can accomplish something sort of similar–not as efficiently–by making extra principal payments on your mortgage every month. Like I said, the program I’m familiar with is a lot more efficient, but it’s pricey.

Hope that helps.

Sharon asks…

Would you go for a 3 or 5 year fixed term mortgage?

I heard on the news that in the UK, it was best to take out a 5 year fixed term mortgage, as the interest rates will go up and 5 years will protect you to an extent. However I have been offered a good deal on a 3 year fixed term. Any suggestions?

admin answers:

Only you can decide that, every person is different.

Helen asks…

What’s good right now in the news?

Thousands perished in an earthquake and hurricane…many lost everything in a raging forest fire…war in the middle east continues…the price of gas keeps rising…mortgage rates plummet…

Are there any good news that actually outweighs the bad??

admin answers:

“China’s giant pandas survive earthquake.”

www.cnn.com

David asks…

Help…mortgage rate hike v/s LTV?

We have a repayment mortgage on a flat we let out, approx 95% LTV left, fixed period ended in jan, also have a second property in which we live, this is fixed for 3 years and 85% ltv. The rent from flat is 725 per month and current repayment is 650, with variable interest at 4.89%. We are worried as to the news of interest rates hikes on the way and would make our repayments really high. We dont have great savings to get a fixed deal. What would you recommend. should we sell the flat now or wait and see how the rate go.

admin answers:

Well, you won’t get rich selling the flat but you won’t go broke either. I’d sell and move on. If you hold on and rates do spike (and perhaps values drop as well) and you can’t then sell the place you may be in a world of hurt down the road. If you could somehow change the rate into a fixed rate that may be the way to go but it sounds like this option is not open.

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