Beware the Cash-Out Re-Fi

This has been a good news week for homeowners looking to re-finance their mortgage loan into a lower rate.  Mortgage interest rates fell sharply this week following more rescue actions by the government.  The average interest rate for a fixed 30-year mortgage loan dropped to under 6%, a seven week low.   Mortgage loan re-financing activity has already picked up.   Unfortunately, re-financing a mortgage loan also creates a substantial risk that the borrower will end up with a larger loan balance.  Read more

If You Pay During the Grace Period, Beware of the Simple Interest Mortgage

This hard truth warning is for homeowners everywhere who carefully schedule their mortgage payments to arrive at the bank or mortgage processor not on the due date but on the last day of the “grace period.”  By grace period, I am referring to the date by which, if your payment is not received, a late penalty is imposed.  (I’m not sure why so many home owners like to push the envelope on this month after month.  If you think it through, you are really only saving yourself one “grace period” worth of interest on one payment.) Read more