equity home loan refinancing
By Gloria Irwin Beacon Journal business writer
When mortgage counselor Fred Vaughn and his wife decided a few years ago to tap their home equity to pay off bills, he learned firsthand about one of the dirty secrets of today's lending environment.
During the home loan refinancing, an appraisal of their home put the value lower than the Vaughns expected.
The appraisal ``did not come in high enough to consolidate all the bills we wanted to,'' recalled Vaughn, who is the deputy director of the East Akron Neighborhood Development Corp. and counsels homeowners facing foreclosure.
The loan officer offered to have another appraisal done, and asked the couple to name the amount they wanted, Vaughn said.
The message was clear: The appraisal would be falsely inflated to justify the amount the couple wanted to borrow, Vaughn said.
More equity home loan refinancing info
Tame your out-of-control equity line of credit
If you owe money on your home equity line of credit or if it feels like you have a gazillion payments left on an adjustable rate mortgage, you are probably feeling the pain of higher interest rates.
Perhaps you obtained your loan when lenders were bragging that rates hadnt been so low since the Cuban missile crisis. Unfortunately, the killjoys swept up the confetti many months ago.
Yet many homeowners are surprised at how quickly their once-great loan packages have turned into aching charley horses. Someone who snagged a home equity line of credit with a 4 percent interest rate in 2004 could now be making payments with a rate thats doubled.
Not surprisingly, interest in refinancing has dropped as the rate miasma has repelled shell-shocked homeowners.
But bunkering down in your overpriced tract home and adopting an attitude of abject hopelessness wont necessarily be your best strategy.