Mortgage Options: Do What Works for You

By Karen Lawson
LoanPage.com Columnist

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Real estate markets, like the stock market, move in cycles. Now that real estate markets are cooling and interest rates rising, many homeowners are trying to guess what will happen next. The bottom line is that your home is your largest investment, and can also be a powerful financial tool, but it's also possible to misuse home equity, and to suffer financial consequences.

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Rising Mortgage Rates: Time for Refinancing?

Many homeowners have adjustable rate mortgages, which were developed to help homeowners get into increasingly expensive homes. Now that rates are rising, many homeowners are finding their payments are rising. If you are concerned about changing mortgage rates and rising payments, it may be time to consider refinancing to a fixed rate mortgage. Your monthly principal and interest payment will be fixed, and you will be paying down your mortgage balance each month.

Using Home Equity to Gain Control of Bills

Borrowing against home equity to pay off high interest consumer debt has become a popular method of putting one's financial house in order. Two primary reasons to consider getting a home equity loan or refinancing your present mortgage to pay off debts is that interest paid on your home mortgage is generally tax deductible and mortgage rates are often lower than interest rates on credit cards and other consumer debt. Refinancing to pay off debts may be the right move, but only if you have the resolve not to incur future consumer debt!

Woulda, Coulda, Shoulda: Never Mind!

It can be fun and informative to follow real estate market trends. We've seen the TV shows about "flipping" houses, and have heard the latest tips from colleagues and friends. The important thing to remember is that your home equity can help you achieve financial stability and meet your goals, but that your home is just that. It's your home, and you want to protect it. Working with your mortgage lender and financial advisor can help you determine how to make the best use of your home equity, while avoiding risky situations.

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage lending. She holds BA and MA degrees in English from the University of Nevada, Reno.

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