Second Mortgages

To ensure that you get the best refinancing rate on your new mortgage it is important that you shop around. Remember every financial institution is able to take advantage of the lowered rates as it is backed by a Federal cut, not an independent promotion. Although you should expect to pay anywhere from 2%-3% of the total loan value in closing fees, by doing your research you can cost your expenses.

For Example: Consider Janice, a first time condo shopper in the L.A. market. She bought her new pad in August of 2008 and decided to take advantage of the low refinancing rates that were available. On the advice of her accountant she worked diligently to secure a loan where the fees would be repaid back by her savings in under two years.

Her quest first started at her local bank branch but quickly ended when they promised a, then, low interest rate of 4.9%, but there were additional points (a point is equal to 1 % of the total mortgage value) that would have jacked up her total costs to an unacceptable rate. After searching the web and shopping around, she finally settled on using the resources courtesy of her managed portfolio. Not only were there no points required to lock in the 4.875% rate (mortgages for condos tend to be a bit higher than the going rate for free standing homes), but they cut many of her other closing costs as she had a substantial amount of money on deposit with them.

Even if the bank or financial institution you normally do business with does not have an enticing offer, there are plenty of other options available for refinancing your loan. One great place to start conducting your research is right here on Go Banking Rates.

With historic lows available for mortgages, consumers are going bonkers and flooding financial institutions with applications. In this new world of mortgage loans only the strong will survive and that means those with excellent credit, a minimum of 20% equity in their home, and very little (other) financial obligations can tap into rates that are falling between the 4.5%-4.75% range (for traditionally 30-year fixed rate mortgages).

Mortgages are loans specifically for purchasing real estate dwellings where the "home" is used as collateral. Some terms as they apply specifically to mortgage loans are:

• Collateral: When a borrower opts into a mortgage loan, their new home purchase becomes the collateral, meaning if they do not repay their loan, after a stringent legal process, the home can become the property of the lender
• Conventional Mortgage Loan: A loan not guaranteed by the government
• Credit Score: Mortgage loans are probably the largest amount of money anyone can borrow in your lifetime and for that privilege, borrowers must repay the principal value with interest. The better (higher) your credit score, the lower interest rate you will be charged, thus saving you thousands of dollars over the lifetime of the loan
• Default: When borrowers do not properly repay their mortgage loans
• Interest Rate: The amount you get charged to borrow money from a financial institution for a mortgage loan
• Pre payment: The act of paying off ones mortgage loan earlier then the loans expiration date
• Principal Amount: The actual dollar amount you are borrowing to purchase the home

Mortgage loans are as basic to the Americana lifestyle as is apple pie! Owning your own house, condo, or other type of living is part of the American dream, and securing a mortgage loan is one of the only ways to finance the purchase. If you plan on buying a home for the long term, say more than ten years, experts advice that you should go for a traditional fixed rate mortgage. It has been said among many people, that "if you do not qualify for a traditional 30 year fixed-rate mortgage, then buying a house may not be for you." There are many other variations for mortgages but for the first time home buyer, a fixed rate mortgage will mitigate any chance of unpleasant surprises.

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