Second Mortgages Can Cap Housing CostsPosted by Nick Niesen on October 29th, 2010 In these times of rising interest rates, second mortgages or first mortgage refinancing might be just the thing to keep your housing costs from going through the roof. In a recent article in Parade magazine, How To Save on Your Mortgage, Lynn Brenner considered the question, ?Will Your Mortgage Rate Go Up?? ?Let?s say you bought a house in 2003 with a $200,000 three-year hybrid ARM. For the first three years, your rate was about 3.8% and your monthly payment was $930. But this year, your rate could be reset to 7.3%, says Greg McBride, senior analyst at Bankrate.com, a personal finance site. That means your monthly payment could jump to $1,334.? Brenner goes on to recommend that, ?If you have an adjustable rate mortgage that?s due to adjust this year or in 2007, consider refinancing. Taking out a new loan with different terms and paying off the old one can save you money. Refinancing does not make sense for everyone, however. If you intend to move in a year or two, for example, you may not save enough to recoup the costs of refinancing?usually about 1.5% to 2% of the loan. ?If you plan to stay in your house 10 years or longer, a fixed-rate mortgage is worth the extra cost to avoid rate increases. A hybrid ARM is a little less expensive, but you are vulnerable to future rate hikes, so look for one whose fixed rate lasts as long as you expect to stay in the house.? Benefits of Fixed-Rate Second Mortgages Like a first mortgage, a second mortgage payment consists of principal and interest. Unlike a first mortgage, nothing is put into escrow to cover expenses such as homeowner insurance, property taxes and Private Mortgage Insurance. Applying for a second mortgage is often faster than refinancing a first mortgage and requires a lot les paperwork. It?s safe and secure to apply online from the convenience of your own home. Mortgages as Products If you have bad credit, you will be charged a higher interest rate, but according to The Equal Credit Opportunity Act, you cannot be denied a loan on the basis of race, color, religion, national origin, sex, marital status or age. To get current rates on mortgage refinancing, visit www.easysecondmortgages.com. For a competitive second mortgage quote, check out www.easymortgagerefinancing.com. Like it? Share it!More by this author |