Thursday, January 24, 2008

Mortgage Refinance Quote Offers Flexibility to Homeowners

Over the past respective years, the lodging market in the U.S. have boomed. Homeowners have got got watched their home equity balloon as lodging terms have soared. In many countries in the U.S., modest homes purchased as recently as seven old age ago have got doubled or tripled in value. During that same period, interest rates dipped dramatically, allowing a homeowner to obtain a mortgage refinance quote. In refinancing, homeowners lowered monthly payments and often withdrew a part of their home equity - via home equity loans and home equity lines of credit - to do purchases or pay down consumer debt with higher interest rates.
In a address given in October 2004, Federal Soldier Modesty President Alan Greenspan said, "Despite average annual mortgage debt growing in extra of 12 percent over the past two years, the financial duties of homeowners have got got exhibited small change as a share of their income because mortgage rates have remained at historically low levels. The tremendous moving ridge of mortgage refinancing, which ended only in the autumn of 2003, allowed homeowners both to take advantage of lower rates to reduce their monthly payments and, in many cases, to extract some of the built-up equity in their homes. In the aggregate, the cash flows associated with these two personal effects look to have got roughly offset each other, leaving the financial duties ratio small changed."
Greenspan continued, saying, "Indeed, the surge in cash-out mortgage refinancings likely improved rather than worsened the financial status of the average homeowner. Some of the equity extracted through mortgage refinancing was used to pay down more-expensive, non-tax-deductible consumer debt or to do purchases that would otherwise have got been financed by more-expensive and less tax-favored credit."
According to the Federal Soldier Deposit Insurance Corporation (FDIC), historically low mortgage rates caused record numbers of homeowners to obtain a mortgage refinance quote and to subscribe on the dotted line to refinance their mortgages at lower rates. In a recent report, the Federal Deposit Insurance Corporation said, "As mortgage rates bottomed out, refinancing volumes peaked in June 2003, but they have got fallen sharply since then...Indeed, the Mortgage Bankers Association recently calculate that the dollar volume of refinancings would worsen 57 percent in 2004 from a record $2.5 trillion in 2003."
More homeowners are seeking a mortgage refinance quote to obtain a home equity line of credit (HELOC). According to the FDIC, these lines of credit have got grown about 30 percent annually. The Federal Deposit Insurance Corporation report states, "The principle for homeowners' greater usage of HELOCs is straightforward. With consumer disbursement outpacing income growing in the 2000s, homeowners have got turned increasingly to home equity lending as a replacement for consumer credit to finance new consumption, reduce outstanding debt, or purchase a home in a two-loan package deal. The entreaty over other more than than costly credit options deduces from the important advantages of comparatively low interest rates, tax deductibility, and easy availability, since income and cash flow diagnostic tests matter less for determining credit lines than for credit cards or auto loans.

Furthermore, because HELOCs offer the flexibleness to pull money only as needed and the convenience of a rotating credit line, borrowers prefer HELOCs more and more over closed-end home equity loans. For these reasons, many homeowners are converting the equity in their home into cash through home equity borrowing and making this sort of transaction an increasingly of import portion of their household finances. With the dramatic diminution in mortgage refinancing volumes since mid-2003, a homeowner would more likely take to tap home equity through a draw on a HELOC rather than extract cash as portion of a refinancing."
Obtaining a mortgage refinance quote is the first measure in obtaining a home equity line of credit that homeowners can utilize for home improvement, debt consolidation, or consumer spending.


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