Home Loan Options and
Considerations as Interest Rates Rise
When to Refinance
There are many options for financing a home. Many homeowners that
originally financed their home are wondering if they should refinance
their home before rates go up. Since their rates are tied to a
fluctuated interest rate, it may be a good option. You may want to talk
to a financial advisor before doing so.
According to the forcasts.org website, the prime interest rate is
expected to go up this year. In 2004 the prime interest rate has made a
steady climb from a little over 4% to over 7% today. They expect the
rate to climb to 7.49% by June.
One thing you need to check before you decide to refinance is your
current contract. Is there a pre-payment penalty if you decide to pay
off the loan early in order to take out a new fixed rate mortgage?
Those homeowners looking to take out equity should also consider
refinancing now as opposed to later. If rates go up home values will
likely go down. Plus you will end up paying a higher interest rate.
Credit Card debt is another consideration. Is it a good idea to
consolidate unsecured debt in secured loan against your property? If
you are unable to make payments on the home loan you may lose your
There are two more issues concerning credit cards. Recently new rules
have forced credit card companies to double their minimum payments.
This could be disastrous when combined with higher interest rates and
changes in the bankruptcy laws. If you were making a good income when
you took the charge, you may not be able to escape paying the debt.
Again, you should talk to a financial professional about this.
Best Syndication Staff Writer
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