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Welcome back everybody -- nation.
And you know what President Obama is about to talk about that mortgage plan that foreclosure mitigation plan.
He could very well change everything you need to know about refinancing to break it down -- that Pollard fair credit advisor at credit dot com.
And -- just -- broad strokes of what we know so far about this plan at a critical part of it.
Will be refinancing people who are current on their mortgage payments doing it through Fannie Mae and Freddie Mac.
But relaxing the restrictions on the -- -- you -- Obviously I think targeting people who are under water.
Who cannot refinance right now.
So does that mean that refinancing is gonna open up you -- I -- to possibly millions of people that's the way that I hope these lenders are ready for all the volume because there's a lot of people who are looking at rates -- -- wish I could do something that they can't do it because.
The equity in our house has gone down and right now what's happened is a lot of lenders where I wanna see that 80% they wanna see buying about 80% -- value.
If you can't do that you may feel shut out of market and the indication is that that will fall by the wayside that 20% equity needed.
But we should point out so we were looking at refinancing applications -- -- double digits in the last week with mortgage rates coming down again.
What -- people need to know if you're are under water how like how low rates need to be for me to refund.
You know I was crunching some numbers -- and it's really hard for people not to want to refinance rate now because rates are really good so for example let's say -- couple 100000 dollars you have 6% rate.
You could come out ahead in just a couple of years with a 5% rate it in the old -- used to be had the interest rates -- to -- these 2% to make it worth your while.
Right now it could be -- -- 1% could make a difference from the electable well if you think the government's -- use all its power to drive mortgage rates even lower do you continue to weigh.
That's the gamble that the gambling on rates are so good my feeling is if you can lock -- -- a good.
Fixed rate this is cheap money.
Go ahead the problem with waiting is twofold one we don't know where -- -- -- and number two.
Imagine how GM these lenders are gonna be it may be hard for them to process files that could take a few months to get your -- -- -- always better to go with a fixed rate mortgage.
I think we've learned -- I mean it's not always better but I think what we have to realize now with that you just can't count on the fact that you can sell your home or refinance a few years down the road so I recommend you go and thirty year fixed.
I even -- recommend -- above a fifteen year and the reason is yet more flexibility can always pay more.
But you can't pay less if something -- for the hearing talk to me about the closing -- -- those should factor in your decision and kind of some general rules of -- to use in terms of the pale right and that's one thing you really wanna take a look at is closing costs they could be.
Thousands of dollars on your mortgage and that's something you -- -- compare when you're comparing mortgage and the highest in new York and you have.
Did you -- -- they run a break even analysis to ask your loan officer to do this again reminding you to calculator.
Find out how Long Will it take you to read coop -- -- closing costs that your new interest rates.
Cases it can get we'll -- you hurt -- in which case most of us are probably seeing -- house for that long.
But if you have a home equity line of credit or second lien loan you wanna combine those two and one here I recommended and the reason is most home equity loans right now are variable rate loan interest rates eventually will go up -- -- interest rates go up if you can were locked into a low fixed rate.
And have that fixed monthly payment that's a lot safer.
With the biggest criticisms and concerns that you're hearing from cut the people who contact credit dot com right now.
A lot of people are frustrated because -- lenders are are doing all kinds of crazy things closing their home equity lines of credit closing their credit card.
Now here's how to -- into the market if your credit card company quote Fisher account that will likely lower your credit score and gas -- At least until we hear -- announcement today we need higher credit scores in that order to qualify for better mortgage rates.
So you really have to watch the whole financial picture what's going should you try and roll credit your credit card debt consolidate your debt into your mortgage or the -- changing.
Unsecured debt into secured debt and it makes it you pitching precarious now I think we've learned that that is a big.
Big big mistake keep your mortgage -- as low as possible you know you can always -- -- -- credit card companies that painful things can shake out there but if you can't pay your mortgage you're in trouble it's it's -- serious -- I prefer you keep that credit card -- out of the house.
-- it was great to see your -- that while our with credit dot com and we will hopefully see you every week maybe on your questions your money and good to see you thank you --
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