I wanted to make yet another short post because I feel that with the last mortgage refinance video, I neglected to fully talk about mortgage home equity loans properly. Home equity mortgage loans are actualy a form of second mortgage. Think of them as a line of credit that you draw on, based on the equity you have in your home.

The problem is, that many people have NO equity left in their home, so they can’t refinance OR even get a home equity loan to boot! I want to point out how crazy this entire mortgage refinance situation is, so that you can fully appreciate and understand this all. So strap yourself in and learn about a new kind of mortgage loan, the home equity loan!

I also want to highlight the fact that this loan definitely ties into the mortgage refinance crisis in its own way, it is not totally innocent. And I also want to let you know, that 90% of the home equity mortgage loans out there, are being recalled, or they already been recalled, due to ever decreasing home values in the United States.

Lastly, I want to make it clear that I did not manufacture this mortgage related video myself, I am simply borrowing it

Many people wonder when all the good stuff will end, and mortgage refinance rates will go up through the roof. As an nj mortgage broker myself, I am going to go out on a limb and say that it won’t be too far into the future! We have had it far too good for far too long. Not that I want mortgage refinance rates to go up, because nobody really wants that, but I do believe it is high time for that day to come, and very soon! And to be perfectly honest, The market does not believe that homes priced for mortgage money below 5% will maintain their values when mortgage rates return to reasonable values, and neither do I.

Redusing mortgage refinance interest rates has always been seen as the quick fix for a down market, and it has failed the last few times. The public is just not buying into that old game, anymore.

Many people also feel that mortgage interest rates are still too high based on the fact that the 10-year bond is so low. they feel they should be getting 3% rates! The premise of the question, “Why are mortgage rates so high?” is the belief that the spread between mortgage rates and treasuries is too wide based on the historical norm.

Mortgage borrowers and home refinance customers are waiting for the BOTTOM of the market, which could take another year to hit that all time low. Buyers don’t care if the mortgage rate hits 1$, they will not buy intil they feel that the bottom has hit.

It seems that mortgage refinance brokers, not direct lenders, are catching a lot of bad heat for the current mortgage mess that this country finds itself in at the moment. And why not, after all mortgage brokers were the ones who wrote 80% of the loans in recent years. Howver, let’s not forget, that it is the BANKS that really make the guidelines what they are. The banks, not the mortgage refinance brokers, are the ones who come out with the new programs. Mortgage brokers just sell whatever they have available to them.

So, the banks really created this mess. An argument may be that mortgage refinance brokers should not have sold the “bad” products, but then the banks would probably have tried to dissassociate with them, because those bad, risky loans accounted for almost 60% of the loans written from 2000-2006! So, in essence, although mortgage brokers and bankers are definitely not totally innocent, they were not the originators of the bad mortgages.

Nevertheless, there obviously has to be a scapegoat, so the little guy takes the fall. It is a tough time right now to be a third party lender in America. With all the new rules and regulations, it is no wonder that many of the mortgage brokers have already jumped out of this business. Below, I have a short video, no it is not mine, or me, but a fellow mortgage broker, who talks about our business in depth:

So, mortgage refinance rates have come down once again. I tell you, it is like a stupid game with the Fed and these crazy rates. It seems like mortgage rates are changing every day, very rapidly and violently. Just last week, mortgage refinance interest rates were at highs, some as high as 6.5%! Ha ha, like that is a reallly high mortgage rate anyway, right? It goes to show you just how spoiled we have all become by the low rates over the last 8 years.

But what if that all changes and we see really high mortgage refinance interest rates? That would put a lot of people into a real shock. It would definitely not help the housing market or the economy in general. But is seems like these mini-mortgage refinance booms keep popping up, it’s just so wacky! I can’t wait until the day comes, when mortgage rates are at 8% again, that way, people will come back down to Earth. Hoem ownership will still be stable, because, after all, people are still going to need mortgages, right!?

There is a long history that led up to this mortgage rate crisis. I won’t go too deep into the details, but let’s just say that the booms are busts are artificially manufactured. Refinance will disappear altogether on day. I mean, would anyone actually want to refinance to an 8% rate, when the average interest rate a typical home owner carries now, is about 6% anyhow?

I wanted to post a video about the history of mortgage rates and refi’s, and also why right now is a great time to buy:

I wanted to take the time to do a better job of explaining how the mortgage refinance process really works. Most people do not want to sit here and read information about a refinance mortgage loan. You would rather see and hear somethign that was a little more fun to experience. So I’m going to keep this to a few paqragraphs at MOST!

Most peol do understand the concept of what it means to refinance a house. Everyone seemed to be refinancing their homes from 2000-2005/6. Interest rates for a refinance mortgage were at 4.75%, so why the hell not?! It caused a lot of bad loans to be made to bad borrowers by bad banks that were run by bad people. But, not all was bad. The people who got good refinance loans generally did okay, and had default rates of less than 2%.

The video I am presenting below, although I did not create it myself, is a great example of what a mortgage refinance is, how you get one, the fees that are included (yes there are fees on all loans) and more. It really can help you to save a lot of money if you get a good loan that you can pay down over time. Of course, the world would be a much better place for you if you did not have to incur so much debt, but most epople just need it, so let’s see, in more detail, what a refinance is, and the general process for going through it and getting much better terms:

In light of all the bad stuff going around in the mortgage and refinance markets, I wanted to make a little comedy out of the whole entire situtation. Come on…without a little fun the world would be a mess. Sometimes, mortgage refinance markets can be so bad that you jsut have to kick back and enjoy yourself a little bit. This mess, like any other financial or wolrd mess, will eventually fix itself.

We did avoid the Great Depression all over again, by a very narrow margin. Mortgage rates are climbing and refinance loans are getting even tougher to do because of the declining house values in the United States. Yes, values are STILL going down. NJ Mortgage rates, the state where I personally am a mortgage loan officer, are going up just like the rest of the country. NJ is one of those states that got hit really hard, because we had such high housing appreciation for so long.

Anyway, I wanted to post a cute little video about the mortgage refinance mess, so that you could get a lugh (or ten). I do not advise you watching this video if you are easily offended by profanity. However, its humor does attempt to make light of the current mortgage mess that we are in right now. Yes, the refinance and purchase markets will turn around, but it is definitely going to take some more time, sorry to say.

There are many people who are just drowning in debt. It is not just mortgage refinance debt, but many other forms of debt as well. So many people have credit card debt, mortgage loan debt, car loan debt, investment debt, personal debt, and every other form of debt out there. Now, I am not bragging, but I am 25 years old, never married, no kids, no debt whatsoever and never will have any.

Now, my lifestyle does not fit in line with what 99.7% of the people in the United States will do, but because I do not believe in mortgage debt, expenses, or any other debt for that matter, I am gonig to be just fine! I bought my condo when I was 22, and paid cash for it ($87,000). Yes, it is the ultimate bacelor pad, 670 sq ft, and that is the way I like it! That is all I need to be happy and live a fulfulling, debt free and mortgage refinance free lif!

But, most people simply cannot go through life like that, their hearts just need much more, and so, they acquire debt, and usually struggle. There is an old saying, “Neither a borrower or a lender be”. You may have heard a grandparent say this, as it definitely is an very old saying. So, in short, mortgages and debt are a hard, cold fact of life for virtually everybody else. Unfortunately, that good advice has no relevancy today. Oh, NO!

I am a licensed mortgage loan officer, so maybe I’m playing devi’s advocate here by a longshot, but I strongly believe in my happy lifestyle debt-free!

avoid mortgage and refinance debt at all costs if you can!

I want to post a short video about debt. I believe the best way for really anyone to learn is to see and listen, and do! Videos about mortgages and debt are a great way to break out of just reading boring stuff. Now I want to make it clear that I DID NOT make this video myself, I am simply borrowing it because I think the narrator did a good job speaking about the dangers of debt.

Most people do not really understand what a mortgage backed security is. I’m going to explain that to you in this article, and then I’m going to show you a refinance and mortgage video via YouTube, that you can watch in case you are the type that likes to listen instead of read

Everyone pretty much knows wehat a mortgage is. You are all familiar with the concept of someone using a mortgage to purchase a house or condo, and how a refinance makes a mortgage term better when you already have one. But not everyone understands how a mortgage is really just an investment instrument on the “secondary market”. First, mortgage loans are purchased from banks, mortgage companies, and other originators. Then, these loans are assembled into pools. These “pools” of loans do get sold on the open investment market for mortgages.

Securitization is the process by which these mortgage backed securities become bonds. They are seen as on of the riskier types of bonds, however. Investors enjoy collecting interest on these bonds when someone pays their residential mortgage loan payments. Investors need to relize that the terms of these securities are not set in stone, and that the interest rate on them may change, or they may be paid off early. So, the investor who buys these mortgage backed refinance and purhcase loan securities, does not have any guarantee of cashflow, but is usually skilled enough to make educated guesses about good investments in mortgages and paper.

There is really not much else to say about mortgage-backed securities, as they are simply a mortgage related investment. They are turned into bonds and sold in large pools to investors. The government has gone through spurts where it started buying them up when the market went sour.

this video explains mortgage backs in more detail!

I am going to make this post rather…short. I am not even going to go into what I have been saying aobut mortgage refinance and purchase interest rates, and the general public, who feel that they know everything about the mortgage and financial markets. I am going to give it to you RAW, and talk with you about when the right time is to lock a mortgage interest rate. It does not matter if you are buying a home or doing a refinance.

People are always trying to “time” the housing and mortgage markets. So when is the right time to lock your rate…NOW! Stop playing around waiting for the mortgage refinance rates to drop from 4.875% to 4.75% to satisfy your obsessive compulsive nature. It’s sickening.

Let’s say that rates have been heading downward for a week or two: Mortgage rates are below 5% and refinance activity is surging. So you now have an opportunity to lock. Shall we do it today or wait for another few weeks and risk that rates will go up? Place your bets.

LOCK IT! If it makes sense, sounds reasonable, and saves you some refinance money, JUST LOCK THE RATE! One day, the stock market jumps, the 10-year Treasury bondrises and BOOM, just like that, your 5% mortgage refinance rate jumps to 5.5% and you’re horrified!

I have given you some real numbers here because I want you to understand how difficult it is to predict the future. If you feel a little abused by this little lesson, welcome to the real world. Time to grow up and start learning about how mortgage and other financial markets really work. Turn off the MTV junk and the soap operas, and start learning about real life.

-end rant.

Getting the very lowest rate of the year is like trying to catch a falling dagger — it’s treacherous business.

This topic is worthy of some further discussion because my experience is that the most unlikely people, real amateurs, they really seem to feel that they are most adept at predicting interest rates. Everyone seems to be a know it all in today’s mortgage climate. everyone wants to be in the know, but we need to focus on reality.

In January of this year, 2009, we saw mortgage interest rates plummet to REAL historic lows. I have recently locked in 30-year loans at 4.75% and 15 year loans at 4.5%. This lead to MANY people, a lot of my past clients, como me to refinance their mortgages.

This does create some major problems. There is a story to be told about mortgage refinance interest rates. It also leads to people making stupid choices like buying homes and getting mortgages that they really can’t afford.

But whatever the rates are today, for some people it seems as if it’s never quite good enough. If the rate is 5%, they want 4.875%. If it’s 4.875%, they want 4.75%. People are ignorant and NEVER satisfied. I have a theory that if mortgage interest rates dropped to just 3%, people would complain that they want 2.75%!

It’s almost like those idiotic morons you see in the gym, arguing because one guy can bench press 5 lbs. more than the other guy. It’s retarded, to put the mortgage situation, quite bluntly.

People generally want the lowest rate possible, purely because it is psychologically satisfying, not because they are worrying about saving an extr $7.00 per month on their mortgage payment.

you cannot predict the future of mortgage rates

There are way too many things that play into where the mortgage refinance or purchase rates will be in the future, all you can really do is make an educated guess. The problem is, the public is too ignorant to really get educated.

People have no damn clue what the hell really affects mortgage rates, and so they TRY to learn by shopping at 300 different banks, then complain how scary and confusing the whole mortgage process is. Gee…..

Then they blame the loan officer and call him a liar when they don’t get the exact interest rate they wanted.