| As the Federal Reserve Bank continues to push the | | | | The interest rate averages for this week show home |
| interest rate higher, homeowners are watching their | | | | equity loans hovering around the same interest rate, |
| adjustable rate mortgage payments inch up as well. | | | | while home Equity Line's of credit or HELOC's are |
| One of the ways to stop your rising mortgage | | | | moving upward, four points in the last week. |
| payment is to refinance to a 30-year fixed rate | | | | "Consumer advocates agree that the best debt to |
| mortgage. | | | | refinance is the highest-cost and longest-term debt |
| "The plan is for the feds to keep raising rates until | | | | because refinancing those offers the most return for |
| inflation comes down.' says mortgage broker Mike | | | | the effort." |
| Johnson. "Expect higher interest rates for home equity | | | | Bankrate shows "First, some refinance after deciding |
| through 2006 and then we should see the feds pulling | | | | to keep a house longer than they originally intended. |
| back the rates." We've already noticed a trend of | | | | Second, some refinance because it's easier to make |
| home prices dropping because the rising interest rates | | | | firm plans for the future if their mortgage rates can't |
| prevent new purchasers from jumping as quickly. A | | | | fluctuate. Finally, some have simply changed their minds |
| recent newspaper report shows some homeowners | | | | about mortgage rates, and think they're headed up for |
| slashing prices simply to get a bite. | | | | a long time." |
| What's odd is homeowners are accepting higher | | | | A shorter term fixed rate mortgage could also help |
| interest rates from a 30 year fixed rate mortgage for | | | | you rebuild the equity already pulled from your home. |
| the security of locking in the interest rate. If their equity | | | | The conversion from ARM to FRM could help you |
| is taking a hit, some homeowners might try to | | | | avoid a balloon payment, and if your property values |
| refinance their entire debt to a secure fixed interest | | | | have actually risen, you might be able to pull even |
| rate. | | | | more equity out of your home in the process. |