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Is it Time to Refinance Your Home Mortgage Loan?
By Sheryl Landrum
CMR Columnist
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Creative home financing in the past few years has created a surge of recent home loan foreclosures. Protect yourself from joining the foreclosure ranks! If you have an option arm or an adjustable rate home mortgage loan, now might be the best time to refinance your home mortgage.
Why Refinance?
Many borrowers took advantage of low interest rate adjustable mortgage programs in the past few years. Now, with their interest rates adjusting upward, many of these borrowers are having a tough time making their monthly mortgage payments. Other borrowers opted for option arm programs that allowed them to make minimum payments and contained negative amortization provisions; these borrowers are now faced with larger home mortgages than the ones they started with and may have a hard time refinancing if they lose equity due to negative amortization and declining appreciation. If you have either of these home loans, it just might be time to refinance your home mortgage loan.
Interest Rates are Low
Mortgage interest rates are still at historical lows and a fixed rate mortgage is still the most stable product. With good credit, a homeowner looking for a conforming loan limit (up to $417,000) can get a 30 year fixed for about 6% and a jumbo loan, greater than $417,000, for about 6.25%. If you still need a lower payment, consider a 40 year fixed rate mortgage or go interest-only on either of these home loan products. You will have the stability of a fixed interest rate and the security that you can afford the payment in the years to come.
Don't join the mortgage foreclosure ranks. Talk to your home loan officer today and check into refinancing out of that option arm or adjustable rate mortgage before your home loan payments become a problem that you can't afford.
About the Author
Sheryl Landrum is a senior loan officer with First Capital Mortgage of San Diego, California.
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