Americans spend more time looking into home-improvement projects than they do on refinancing. With mortgage rates at less than 5% this year, the lowest in any 10-month stretch since 1971, proper research can save tens of thousands of dollars during the life of a home loan."People seem not to want to spend a lot of time on mortgage shopping, but it's incredibly important," says Stan Humphries, chief economist for Zillow.com, a real estate Web site that provides price estimates on 70 million U.S. homes. "It's very common that people will just reach out to their current lender to see what they can do about rates."
Humphries says those who plan to refinance ought to check different lenders' rates -- as well as their reputation.
A recent survey by Harris Interactive for Zillow.com of 2,897 consumers who obtained or refinanced a home loan in the past five years found they typically spent only five hours on research. An equal amount of time was spent planning a vacation and, on average, more time was taken in researching a car purchase (eight hours) and home improvements (10 hours). When calculated as time spent per dollar invested, Harris Interactive determined that Americans spend almost 80 times more time researching their vacation than a home loan.
According to Zillow's Mortgage Marketplace, refinance-loan requests through its site are up 39% since September, making up more than 51% of all consumer-loan requests. Its sampling of offered rates is even more competitive than Freddie Mac's(FRE Quote) statistics. On Nov. 2, its average 30-year mortgage rate was 4.78%, 77 basis points lower than in June, when it was 5.55%, the highest this year.
Refinancing has accounted for almost seven of 10 mortgage applications this year, according to Frank Nothaft, chief economist at Freddie Mac. Thirty-year fixed-mortgage rates were 6.46% a year ago, according to Freddie Mac.
Even a slight decrease in rates can mean big savings. Assuming a fixed rate of 4.9% on a $200,000 loan (with a home price of $250,000), the monthly principal and interest payment would be $1,064, compared with $1,141 for the same loan in June. The savings would total $27,788 over the life of the loan.
Zillow.com's Humphries doesn't expect the record-setting lows to last much longer. As the Federal Reserve ramps down its purchase of mortgage-backed securities, he expects rates to begin to rise in the first quarter.
"You see plenty of people speculating on both sides, but I would definitely say that the probability of the upside in outweighs the probability of the downside," he says.
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Saturday, November 28, 2009
Sunday, November 15, 2009
What you Need to Know about Home Improvement Financing
Acquiring a Secured Loan for your Home Improvement Projects. Financing home improvement projects is a great way to invest in something long-term. It will help to raise the value of your home quite a bit. Home improvement financing can cover many projects associated with repairs and renovations of your home.
You can remodel, add a room, or have a pool put in. You can even finance to bring your home to a more green status by adding a glass house for organic growing and for energy conservation.
Home improvement financing is a type of home equity loan that lets you withdraw from your established equity for cash. Home equity financing usually allows for a much lower interest rate and better terms than with other types of loans that you can get. This is because it is a secured loan against your property.
Financing for home improvements can benefit you in the following ways:
1. You have the option of fixed or variable rates.
2. You are given more flexibility in how you repay.
3. You are provided much lower interest rates than most home loans would offer you.
4. You can finance for any home improvements that you want to make.
5. There is no application fee or costs associated with this type of financing.
Some find the whole process of financing for home improvement very stressful and takes more time than they wish to provide for it. There are some steps you can take to help the whole process run a lot smoother.
1. Formulating a Plan: Having a well thought out plan as to how your home improvement will proceed is important. Draw it out on graph paper and make a list of everything that you are moving, adding, or changing.
2. Developing a Budget: You need to figure out how much your renovations will cost and how much equity in your home you have to work with. Sticking to a budget can help ensure that you project runs smoother.
3. Contractor Team: The outcome of your home improvement project ultimately lies within the people you hire to get it done. Interviewing many people helps you to choose the right ones and get a reliable team on your side to do your project.
4. Be Prepared: The project you are undertaking can, at times, become very stressful and take up a lot of your spare time. Being prepared for problems to arise is a good way to help keep your calm in the time of crisis.
Source
You can remodel, add a room, or have a pool put in. You can even finance to bring your home to a more green status by adding a glass house for organic growing and for energy conservation.
Home improvement financing is a type of home equity loan that lets you withdraw from your established equity for cash. Home equity financing usually allows for a much lower interest rate and better terms than with other types of loans that you can get. This is because it is a secured loan against your property.
Financing for home improvements can benefit you in the following ways:
1. You have the option of fixed or variable rates.
2. You are given more flexibility in how you repay.
3. You are provided much lower interest rates than most home loans would offer you.
4. You can finance for any home improvements that you want to make.
5. There is no application fee or costs associated with this type of financing.
Some find the whole process of financing for home improvement very stressful and takes more time than they wish to provide for it. There are some steps you can take to help the whole process run a lot smoother.
1. Formulating a Plan: Having a well thought out plan as to how your home improvement will proceed is important. Draw it out on graph paper and make a list of everything that you are moving, adding, or changing.
2. Developing a Budget: You need to figure out how much your renovations will cost and how much equity in your home you have to work with. Sticking to a budget can help ensure that you project runs smoother.
3. Contractor Team: The outcome of your home improvement project ultimately lies within the people you hire to get it done. Interviewing many people helps you to choose the right ones and get a reliable team on your side to do your project.
4. Be Prepared: The project you are undertaking can, at times, become very stressful and take up a lot of your spare time. Being prepared for problems to arise is a good way to help keep your calm in the time of crisis.
Source
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