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Mortgage Refinancing As the Dust Settles
By Gabriel Traverso
CMR Columnist
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Across the country, major housing markets are facing what might be the biggest one-year price decline since the eighties. Many homeowners took out alternative mortgage loans in recent years and now need refinancing as their payments start to rise.
The Market is Still Stabilizing
Some of the real estate markets that saw the biggest price gains in the past few years are now facing big declines--as much as 9% over the next 12 months. Some of these markets are now also seeing a dramatic rise in mortgage default rates and foreclosures. In April, nationwide foreclosures spiked over 60% from this time last year, according to RealtyTrac in California. Nevada, Colorado, Connecticut, California, and Ohio are the states seeing the highest foreclosure rates. Homeowners everywhere are scrambling for mortgage refinancing.
Good News for Homeowners
The good news is that the future is looking brighter and many analysts think the next year and a half will bring steady price gains. Plus, current mortgage interest rates are still very favorable. National Association of Realtors president, Pat Vredevoogd Combs, recently indicated that, "It appears the worst of the price correction is behind us." According to Celia Chen of Economy.com, we should see price gains of between 2% and 4% by 2009.
Refinancing Your Mortgage During Housing Fluctuations
If you have an adjustable rate mortgage (ARM) and are facing rising payments, you ought to look into refinancing right away--especially if prices are falling in your area. My advice: use the Net. Mortgage interest rates are still quite good. Do your homework online, research what rates you might qualify for, and weed out lenders who can't work with you by using online mortgage quote tools. You'll find it a much more efficient use of your time and in the end you should get the refinancing you need.
Source
CNNMoney.com: Forecast: 100 Biggest Markets
About the Author
Gabriel Traverso is a freelance writer, professional musician, and artist. He resides with his family in Reno, NV.
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