Reports of an improved job market, drop in the unemployment rate, settlement deals for unlawfully foreclosed homeowners and better mortgage debt solutions have brought a much needed sense of hope to Americans. It appears as though the economy is beginning to show some signs of recovery, albeit slow and small.
The Future Mortgage Industry
For the past few years, the mortgage industry has struggled quite a bit to stay afloat and maintain itself. Poor lending practices, the foreclosure crisis and climbing rates of homeowner default have all brought the once stable and profitable market to a grinding halt. Since then much attention has been on finding solutions for change in hopes of bringing recovery. As the economy, and mortgage industry, appear to be turning over a new leaf a word of caution goes out to homeowners considering refinancing options.
First, be sure that refinancing is your best option. Refinancing can cost more out of pocket and has more serious long term consequences than a loan modification. For example, the life of the loan will be renewed, extending the amount of time you will be locked into the mortgage. Any progress made on paying towards your old 30 year mortgage will be lost and you will begin a fresh new loan from year one.
Also, be sure that refinancing now is the best time. Although interest rates are at all time lows, industry analysts expect the rates to remain low for quite some time. Homeowners shouldn’t feel rushed into refinancing now if they (a) can’t afford it, (b) aren’t sure they are going to stay in the home for the next five or more years or (c) don’t qualify for a rate that is more favorable than their current one.