What is Refinancing a Mortgage?

Refinancing Your Mortgage

Often, we will all find ourselves daydreaming of something we would like to do or like to own, and immediately the part of our brain that dictates realism will snap shut on the daydream and remind us that we simply do not have the money to spend on indulging our idle fantasies. While there is every need to maintain a realistic outlook on life, it should not be at the expense of our dreams, and if the opportunity arises to enjoy ourselves in a way that will not bankrupt us, then sometimes we owe it to ourselves to at least consider it. However this does not change the fact that money is not always so easy to come by. One solution that a lot of people use is a refinancing option on their mortgage.

By refinancing your mortgage what you are effectively doing is extending the term of the arrangement in return for extra cash. This is something that a lot of people do for practical reasons like renovating their existing house. Others will extend the term of their loan in order to lower the repayments and enable them to remain in a house where they are finding the mortgage payments hard to maintain. Either way, when you refinance a mortgage you are allowing yourself financial breathing space in the short-to-medium term and accepting a longer time will be spent paying off debts. If you are happy with the fact that you will have less time mortgage-free once the loan is fully paid off, then refinancing can open a lot of doors for you.

One reason why refinancing is so popular is that it is given at the same interest rate as most mortgages. If a mortgage holder also has credit cards or loans with a higher rate of interest, they can use the refinancing to pay off the higher interest credit, allowing themselves as a result to save a great deal of money on repayment. In consultation with your lender – or another lender altogether – you can negotiate a solution to most situations, one which will allow you to feel as though your future can be free of major financial worry. It is, nonetheless, worth paying attention to the fact that none of us can infallibly predict the future, and if you are to refinance it is a good idea to look at making the term as short as possible while still retaining some element of manageability in the repayments.

Whatever your reason for refinancing, it is certainly one of the more reliable and sensible methods of raising quick capital, and as long as you have a good payment history on your mortgage you should have very little difficulty securing a satisfactory refinancing deal. Ask yourself whether the refinancing deal gives you enough freedom to be worth it, and whether – once the money has been put to use – whether you will be able to live comfortably with the repayments. If the answer to both questions is yes, then refinancing can work for you.

What Moves Mortgage Rates?

Mortgage Rates – What Drives Them?

One of the most frequently used words in the mortgage business is “rates”. Actually, to be entirely fair, it is one of the most frequently used words in the mortgage advertisement business – in no small part because the word “interest” is known to terrify a large number of people, even those who do not know why it does. Interest rates are one of the financial indicators that draw quick and decisive reactions from financial experts presenting specialised programs about money which always seem to be on when you are stuck in front of the television. It may be hard to pay attention, but it is worth it – you could just save yourself a lot of money.

When interest rates are high, it is a sign that the economy is in one of its periodic “boom” phases, and the government and banks are placing more interest on transactions essentially in order to discourage excessive and overly-optimistic consumer behaviour. Unsurprisingly, then, when interest rates are low it tends to be a sign of just the opposite. The economy is in poor shape, the banks are reluctant to lend and businesses are struggling to keep their heads above water.

While these periods are traditionally poor for business and considered to be bad financial times, they can be advantageous periods for people with borrowing power, who will find that the lower interest rates increase the range of properties which they can buy. Governments encourage people to spend in these times as they feel it stimulates the economy, but only those customers who have built up good credit scores over the years need apply – bad credit ratings mean limited access to credit, and financial recession means the same. Limiting access to credit this much more or less guarantees that only those with the top credit ratings are entitled to expect a mortgage.

This balancing act by the banks is one of the more interesting elements of the lending business. On the one hand they have deals with low interest rates, which any borrower would covet at any time. On the other hand, they are unwilling to give mortgage deals to any customer who does not have a positive credit rating. This is a situation which, if allowed to persist, would mean a lot fewer homeowners in any society, and would have grave implications for the economy. The typical upshot of this is that governments will step in to inject some capital into the banks and persuade them to lend to consumers. Compared with times gone past when banks were occasionally too ready to lend even to high-risk customers, this situation is one that offers different challenges.

One situation that has arisen in the past, and which banks are keen to prevent from happening again, is the sub-prime mortgage crisis. In that crisis, people who had little or no credit rating were given mortgages anyway, with high interest rates to reflect their high level of risk. Unsurprisingly this led to a lot of people defaulting on their mortgages, and partially triggered the worst financial crisis this world has seen in over sixty years – a crisis we are still dealing with, so it remains to be seen what lessons have been learned.

Dealing With Mortgage Terms And Conditions

Mortgage Terms And Conditions – The What, When And Why

When buying a house, the average person finds that it is something that will be impossible to do without borrowing money. This is why people get mortgages which, from all the doom-laden pronouncements about them, you would think were quite simply a bad thing. However, a mortgage when handled well is the little piece of freedom a person needs in order to benefit the quality of their life by securing themselves and their family a place to stay underneath one roof. The key part of that last sentence was the phrase “when handled well”. In order to make the best of a mortgage it is absolutely essential to be aware exactly how you plan to operate in the years to come. This is a large commitment, sometimes up to forty years’ worth of commitment.

Every mortgage comes with a full list of terms and conditions, and although these may be printed in small type and be worded in highly legalistic language they are still worth reading, ideally before you sign for the loan and complete the deal on the house. The terms and conditions of a mortgage agreement are legally binding and, once you have completed the agreement, you are bound to abide by them. Failure to do so can be met with financial penalties and worse, so it is worth remembering before you put pen to paper that this agreement will bind you for the life of the contract. Many people will give the document to their lawyer to look at, but it really helps to read it yourself, too.

Most of the terms and conditions of a loan are completely self-explanatory and even rather obvious when one thinks about them. This is why so many people fall into the trap of not reading what is written in them, and later find themselves to be in a situation where they have contravened their agreement and face a penalty for doing so. The terms and conditions will, in general, apply to matters such as prompt payment of monthly contributions, by the agreed method on the agreed date and, importantly, for the right amount. These are the elements which apply to all mortgages. It is the elements that apply to some and not others which cause people to have problems.

Most credit agreements have similar stipulations, but mortgages are a different thing from the typical credit account due to the fact that they are secured credit agreements with a term life that far exceeds just about any other loan. Different rules must therefore apply, and it is your mortgage which will be considered the “priority debt” if you ever go into a managed debt agreement or a bankruptcy. Having an awareness of the terms and conditions of your mortgage, and sticking to the letter of the agreement, is your best bet when it comes to running a mortgage well. Even if it seems boring, it will soon become second nature, and it should see you safely reach the point where you can pay the mortgage off in full.

Toronto’s New All-Glass Skyscraper - The Bay Adelaide West Tower

Skyscrapers Toronto

First Published: July 18, 2009 ADawnJournal.com

Toronto’s new sky-blue, all-glass, 51-story skyscraper is situated in the heart of Toronto downtown, in Toronto’s financial district at the corner of Bay and Adelaide streets. The Bay Adelaide West Tower (1.1 million square foot – 715 ft / 218 m tall) is the first building of the of the 2.6 million square foot Bay Adelaide project. Construction started in summer 2006 and expected to be completed in 2009. This tall tower is located at 333 Bay Street, Toronto, Ontario, Canada. The Bay Adelaide West Tower has many state-of-the-art safety features including blast resistant lower 11 floors.

Joint Mortgages – The Positives And The Pitfalls

What Is A Joint Mortgage?

First Published: July 2, 2009 ADawnJournal.com

Taking out a mortgage is an almost indispensable part of buying a house for many individuals. Those of us who have been party to a windfall via inheritance, as a prize or a bonus may be able to pay directly by cash to own the house we want. The rest of us will need, as most people do, to find a mortgage that suits our needs and our means.

Mortgage borrowing is quite unlike any other kind of borrowing. The amounts are higher than any typical loan or credit line, and consequently the term of the loan will usually be longer. As the term is longer, this means the scope for default is consequently larger. With the larger scope for defaulting on a mortgage comes the need for banks to cover themselves before lending. The outcome of this is that if you cannot meet mortgage payments, your home is at risk.

With the higher level of commitment and its knock-on effect on just about everything you could possibly think of, the amount of thinking that needs to go into taking out a mortgage naturally will increase. Although all you really want is to buy a house, you need to stop and think about what the best way of going about things will be. Can you afford to take a mortgage that will secure you the house you really want? How sure are you that the payments you can make today will be affordable five years from now, or ten years, or twenty? If borrowing to buy a house will really over-stretch you, you may need to take a different angle.

The angle that people will traditionally take – if they find that their borrowing ability is not conducive to buying a house alone – is to look at taking a joint mortgage with someone else. If the house purchase is part of a couple, married or otherwise, trying to set up home together, then there may be an obvious situation. In some couples, though, only one is gainfully employed and eligible to get a good mortgage deal. In others, it may be that one of the partners has poor credit history, which will lead any lending institution to either decline the application or at the very least put restrictive terms on it.

Some people will choose to co-sign for a mortgage with a parent or other older relative. In these cases, assuming that the elder party is “young enough”, there is a lot of scope for a good deal. However, it is important to realize that although a joint mortgage brings in two different incomes, two different histories and two different brains, it also encompasses two different personalities – and if at any point those two personalities start to clash, there will be problems in the operation of the account that could make an individual look like the most secure borrower of all. If borrowing as joint mortgage account holders it is important to take account of this, and make sure the loan is flexible.