Adjustable Rate Mortgages

I was on www.Activerain.com (another blogging site) this morning and read a blog from a mortgage person recommending or promoting adjustable rate mortgages. He was partially right in some aspects. Yes some adjustable rate mortgages rates are better than a 30 year fixed rate right now. Yes you can save money. Yes if your plans are to move in 3 or 5 years it may be a good alternative.

HOWEVER, ADJUSTABLE RATE MORTGAGES HAVE GOTTEN MANY PEOPLE IN TROUBLE. You have to look at the down side that is possible. Not just at how much you are going to save. You have to think what happens if I can't refinance later on because the rates have gone up. Or you can't refinance because the home value has gone down. ( like right now)

I am an old school person. I believe you should be trying to pay off your mortgage, not have a mortgage when you retire. I believe more in a 30 year fixed mortgage, though there are cases when a Adjustable rate mortgage is okay. An adjustable rate mortgage is okay if you plan on selling before the rate adjusts. But for me to promote them as a great way to no. No way, no how.

For more on Michigan mortgages, Michigan real estate, and Michigan things to do
go to www.russravary.com

Have a great day. Russ Ravary

Should I refinance part 2

So you are thinking about refinancing. If you are in a fixed mortgage and have been in the mortgage for 3 or 4 years it may not make sense to refinance.

You have to work the numbers. Lets say you are going to save $50 a month, it is a no-closing cost loan, and you have been in your other mortgage for 4 years. So what you do is multiply your mortgage savings a month by the number of months left. So 26 years times 12 months a year times $50= $15,600 savings

But you are going to have a $200,000 at 5.75% and now you are back to 30 years. You have 4 extra years of mortgage. So what you do is multiply $200,000 times .0575 times 4 years= 46,000 in interest costs.

So sure you are saving $50 a month but you are adding on 4 years and $46,000 in interest.
That doesn't make sense financially.

If you live in Michigan and want to find out if refinancing is good for you email me at info@russravary.com For more Michigan mortgage articles and mortgage info feel free to go to my website www.russravary.com

Fed drops rates again

The Fed drops it rate again, and it had no effect on the Michigan mortgage interest rates today. 30 year Mortgage interest rates are still below 6% but have not dropped dramatically for any length of time. Hopefully in the next month we will see rates slowly creep down. There are a lot of people out there that could use a break to get their adjustable rate mortgages changed into a fixed rate mortgage.

If you have an adjustable rate mortgage you should contact a mortgage person. They can check the value of your Michigan Home to make sure a bank will even loan against the house. Many homes have lost a lot of value making it impossible to refinance. Also the loan officer can put you on a watch list so when the rates do come down that you will be notified. It may make sense for your neighbor to refinance at 5 3/4% where it may not save you any money because you had a lower rate than he did before. You may need it to come down to 5 3/8% before it makes sense to do it. A No-closing cost loan may make sense for you. Email me at info@russravary.com to find out when it would make financial sense for you to refi and to be put on a rate watch list. For more on Michigan mortgages and Michigan homes for sale go to my website www.russravary.com

Have a great day. Russ Ravary

Lower mortgage rates this week

Hello Michigan,

Many people do not follow the mortgage market. Here is the latest update. Mortgage rates for 30 year fixed mortgages have dropped below 6% in the last few weeks. The people that this might be good for:

For people with adjustable rate mortgages this may be an opportunity for you to refinance and lock in a fixed rate. It may even pay to lock in a rate now if you are a year or two out.

For people who bought a home last year, mortgage rates are much lower right now. If you put money down you may be able to refinance and save money. You can even do a no-cost loan and save a substantial amount of money over the 30 years. It may not cost you a dime.
If you want to find out how much you can save or whether you can refinance to a lower rate feel free to call me on my cell at (313) 310-9855 or email me at ourmortgageguy@yahoo.com Feel free to visit my website at www.russravary.com for more mortgage information, or credit scores, credit info.

My rate is going up what do you do?

If you just received a letter in the last few months informing you that your interest rate is going up then you don't want to wait. Call your local mortgage person, or myself www.russravary.com and start checking into it. You should never give out your social security number to more than 2 or 3 lenders. Preferably you want to meet them in person.

If you have your credit run by more than 2 or 3 lenders you have a chance of your credit score dropping. Your credit score drops because there is too many inquiries. It signals that you are getting more credit. It drops because it is an unknown. How much credit do you apply for. If you applied to four different credit card companies for 4 different cards of $10,000 each and you ran them up. Then you are a credit risk. The credit bureaus have no way of telling what you are doing. So they lower your score until they know. They don't know if you have been turned down, if you are shopping for a good rate, are in trouble financially, or what.

Find out if you can refinance and fix your rate. Go over the different scenarios with the lender.

May this week bring you good news.
Russ Ravary "your friend and mortgage consultant for life"