Second Mortgage

It is surprising that many people still hold mortgages with 7.5 interest rates which was not the mission of Ohio refinance boom of 2002.

Even among the people who have recently refinanced their Ohio home, more than 50 percent held mortgages with interest rates greater than 8 percent. Amazing. People will drive across town to use a $3 coupon, but they consistently miss out on opportunities to save tens of thousands of dollars through refinancing.

Undoubtedly, the hassles of applying for an Ohio mortgage push people to procrastinate. A friend of mine who recently refinanced a 9 percent Ohio mortgage on an investment property had actually placed this task on his “to do” list three years earlier.

During that period of procrastination, he could have profitably refinanced two or three times. His savings on interest and additional equity buildup would have totaled $15,000. That’s a steep price to pay for procrastination.

Even filling out an Ohio mortgage application doesn’t create enough pain to offset that kind of money. Should interest rates at some future time make refinancing profitable for you, work through the numbers. Don’t procrastinate as do millions of property owners. Look closely at your cost savings and equity gains.

Imagine how you might enjoy that money later. Measure the time required now against the gains to be real Translate that gain into a dollars-per-hour figure. You’ll probably earn well in excess of $1,000 an hour. For most people, those are pretty good wages.

What you saved in monthly payments, you more than lost in Ohio equity buildup. Plus, your new loan runs for 30 more years, whereas the old loan would pay off in just 21 years. If you really wanted to use a no-cost Ohio loan, you could refinance profitably into a 7.0 percent (or maybe o’.7.r» percent) 20-year loan. Your Ohio equity would build even faster—after Id years, you would owe $133,459.

Why do Ohio loan reps push the 30-year refinance? Because the immediate monthly savings look so much better. With the 30-year Ohio loan at 7percent, your payment drops by $247 per month. With a refinance into a 20-year Ohio loan, the payment slips just $28 to $1,550.

Regrettably, most Americans think in terms of low monthly payments now. As a reader of Mortgage Secrets, you know better. Whether choosing home financing or refinancing, give as much regard to equity buildup as you do the amount of die monthly payments.

The Equity Killer: No Cash Closings

As you saw with my friend Sue, many of these supposedly no-cost refinance actually charge large amounts of fees at closing, but add them into the Ohio mortgage balance. When this add-on occurs along with a renewed 30-year term, Ohio equity buildup is set back years. Never sign up for such an Ohio loan.

The money you lose will far exceed your apparent immediate gain. Get the loan rep to run amortization schedules for your various loan alternatives, or click on to any of the mortgage calculator Web sites and then compare the respective equity buildups. Make your Ohio loan decision with the facts in front of you.

How much will that lower payment cost you in future Ohio equity?