Some mortgage rates inch higher

Some mortgage rates rose along with bond rates this week as reports of stronger consumer spending in November were tempered by disappointing readings of other economic measures, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.17 percent for the week ending Dec. 27, up from 6.14 percent a week earlier.
At this time last year, the 30-year fixed-rate mortgage averaged 6.18 percent.
"Stronger consumer spending and an increase in the core price deflator in November caused long-term bond yields to inch up over the end of last week and beginning of this week, with mortgage rates following," said Frank Nothaft, Freddie Mac (FRE, Fortune 500) vice president and chief economist in a statement Thursday.
"Offsetting some of the increase, however, was a decline in November's index of leading economic indicators and a weak manufacturing report in Philadelphia for December," added Nothaft, who expects consumer spending to slow in the near term.
Mortgage applications tumble
Freddie Mac said 15-year fixed-rate loans averaged 5.79 percent, unchanged from last week. A year ago, the 15-year rate averaged 5.93 percent.
Five-year adjustable-rate mortgages (ARMs) averaged 5.90 percent this week, also unchanged from last week. A year ago, the 5-year rate averaged 5.98 percent.
One-year Treasury-indexed ARMs averaged 5.53 percent, up from 5.51 percent last week. At this time last year, the 1-year ARM averaged 5.47 percent.

Equity loan

An equity loan is a mortgage placed on real estate in exchange for cash to the borrower. For example, if a person owns a home worth $100,000, but does not currently have a lien on it, they may take an equity loan at 80% loan to value (LTV) or $80,000 in cash in exchange for a lien on title placed by the lender of the equity loan.

Many lending institutions require the borrower to repay only an interest component of the loan each month (calculated daily, and compounded to the loan once each month). The borrower can apply any surplus funds to the outstanding loan principal at any time, reducing the amount of interest calculated from that day onwards. Some loan products also allow the possibility to redraw cash up to the original LTV, potentially perpetuating the life of the loan beyond the original loan term.

The rate of interest applied to equity loans is much lower than that applied to unsecured loans, such as credit card debt.

Mortgages

Mortgages are a necessary part of home buying. With as many diverse types of mortgages as there are mortgage rates, finding what you need can be difficult. But on NationalRelocation.com, the different types of mortgages are laid out on their own pages so the task is easier. Whether you are buying your first home or looking for a mortgage refinance, you want to find the best mortgage rate possible. Mortgages will allow you to own a home, whether a starter home or the home of your dreams, without having to wait until you can pay for it outright. It is a good idea to get mortgage quotes for your home purchase so that you can choose the right type of mortgage for you and your family and get the best deal on a mortgage rate and an interest rate possible.

Here are some basic things to know about mortgages:

• Mortgage companies and lenders are the institutions that will lend you money to pay for your home. A mortgage company will give you a loan for your home, but you are indebted to them for that loan until you pay it off. Lenders will work with you to determine a mortgage rate, as well as decide if you will need any mortgage insurance or a second mortgage. It is a good idea to shop around for a lender or mortgage company, as every institution will offers different mortgage rates and mortgages.
• One of the decisions you'll have to make includes whether to get a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM). This is an important decision, as one type of mortgage rate may be a much better fit for you. With a fixed rate mortgage, your monthly rates will always be the same. An adjustable rate mortgage means that your monthly payments will vary, or adjust, according to the market.
• If you already have a mortgage but aren't satisfied with your current mortgage rate, you can refinance it to get a lower rate. By doing this you can save money now and in the long term. Your new refinanced mortgage might be for a shorter term, meaning that you'll save on interest in the long term because you'll be paying your mortgage for shorter period of time. Another reason to refinance your current mortgage would be to upgrade your current adjustable rate mortgage (ARM) to a different one so that you can take advantage of the introductory period when the mortgage rate is very low. Fixed rate mortgages can be refinanced to get a lower fixed rate, as well.
• A home equity loan or second mortgage is a way to get money out of your home. Even if you already have a mortgage, you can borrow against the amount of money your home is worth minus what you still owe on the first mortgage. You can use this money to improve the value of your home, pay off debts, or pay college tuition costs.
• If you are a veteran or current member of the U.S. Military, you can qualify for a VA loan, or Veterans Affairs loan. This loan carries many benefits that non-veterans do not have access to. For example, the mortgage rates for VA loans are usually lower. Also, sometimes having a VA loan will mean that you don't have to make a down payment on your home purchase. The benefits for veterans and their families are numerous, but you must be eligible to pursue such mortgages.
• Are you 62 or older? You may qualify for a reverse mortgage, if it fits your needs. A reverse mortgage allows you to receive payments from the equity in your home. The mortgage rate becomes money that you will get every month, in one lump sum, or as a line of credit. In this way, the mortgage is "reversed" so that the mortgage lender is paying you instead of the other way around.
• Do you have bad credit but still want to buy a home or want to refinance? This is possible through bad credit mortgages, which will help you to refinance your current mortgage or allow you to consolidate your debt. You may have less options than someone with good credit and you may have to work harder to get one that fits your needs, but with a B, C, or D credit score you can still get a good mortgage rate.
• Lenders mortgage insurance (LMI) or private mortgage insurance (PMI) is a premium that a borrower pays to a lender. This is sometimes required to protect the lender in case the borrower defaults on the home loan. Sometimes you can pay this up front, but sometimes it is built into the monthly mortgage rate. It is usually required when your downpayment is less than 20% of the home's value.

So finding the right type of mortgage and the best mortgage rate to fit your needs can be a daunting thought. But it doesn't have to be. Explore the different types of mortgages on NationalRelocation.com and find exactly what you're looking for. Your mortgage refinance, home equity loan, VA loan, or adjustable mortgage rate (ARM) mortgage will feel a lot less stressful after finding the best lender or mortgage company to fit your needs.