American Home Mortgage

Owning a home is really a matter of freedom of choice. Whatever your age may be, in the heart of every homeowner burns an intense desire to own their home free and clear. Even if you are a retiree carrying forward your mortgage into retirement, the choice is entirely yours, though it might give way to unnecessary anxiety. When folks are nearing the age of retirement, the homeowner equation shifts in a way that the pensioners focus on getting rid of the mortgage which definitely makes sense as it would improve the future retiree's personal financial safety net as it makes it easier to ride out the inevitable swings of the business cycle. The marked decline in the market value of real estate and homes in the US shouldn't really matter to the retiree or the few pensioned employees so long as he or she has sufficient financial resources to keep paying the mortgage. However, if as a pensioner you choose to carry a mortgage payment into retirement, it can increase your sense of psychological and financial vulnerability.

What is notable is that it wasn't just the value of homes that dropped in US during the recent recession - stock market values plummeted, and along side did most bonds, with the important exception of a few. Most corporate bonds, state and local government debt issues, fared poorly. Consequently, many pensioners felt the urgent need to cut back on their spending patterns as they came to the realization that they have less wealth to dig into than before. And the home mortgage payment only adds to the financial pressure.

In a survey conducted among retirees by a leading research institution in the US, nearly two thirds of Americans consider paying off the mortgage in full before they reach age 50 as a prime necessity as they felt that they would have to deal with unnecessary pressure in the later stages if they didn't close it earlier and this has been voiced by over 62% of US consumers. Those who have set their goal to pay off their home mortgage by 50 also wanted to take more holidays with 52% saying they are planning to do this. In effect, younger and the ticking-towards-50 age group mortgage holders are making overpayments with the goal of paying off their mortgage early so that they wouldn't feel burdened after 50. One reason for this haste to make overpayments on their mortgage has been due to the current environment of low interest rates.

What is becoming evident is that many mortgage holders are making good use of the low interest rate environment to ease their future burdens. This January, consumers repaid billions, the biggest net repayment in over a year and more mortgage debt than was advanced to new borrowers during the month.

Though mortgage approvals for the month of January was lower than that of December it was 43% higher compared with January 2009. January's sharp fall has been attributed to the end of the stamp duty holiday, which prompted a steep incline in the home purchases in December 2009. As in some cases where the mortgage lender may want to impose an early repayment fee, the borrower would be compelled to pay the entire loan before its expiry to be able to get another mortgage or to remortgage your home. The month-after-month fall in remortgaging can be due to borrowers closing fixed-rate deals to stick with lenders' relatively attractive standard variable rates, instead of opting out for a new loan spurred by the low prevalent interest rates. Many lenders have begun to offer competitive fixed-rate mortgages and variable rate mortgages offering customers a variety of choices.

Article Source: Richard Henry

I've been involved with mortgages and real estate for almost twenty-five years. But honestly, I've never seen a market or even a government response like what we're seeing in the United States. I don't care which side of the political fence you're on, these are nerve wracking times...especially for homeowners and would be homeowners who need to get on with their lives, sell their houses, and finance the purchase of new houses. The big question is...what does the future hold?

Well, every time I've tried to predict anything, I've been partially right and partially wrong. So, check back with me in a year or three and we'll see how well I did. But here's what I think is going to happen to the American mortgage scene.

In the sort run, banks are going to be bailed out, and some homeowners are going to benefit from more easy, government backed, money. Not as many as touted by the politicos, but more than usual. If you're paying attention to what's happening, you can already see where banks (and other industries) are taking their bailout money and not really applying it where it was intended to be applied. Just because banks get money from the government doesn't mean they are going to save everyone from foreclosure.

But let's say that at least a large percentage of the homeowners who are currently in foreclosure care helped through reduction of their principals, renegotiation of their payments, or some sort of subsidy. Well, there are only so many times this can happen, and Americans are already getting "bailout weary". So, unless forced to by government, I can't see lenders getting themselves in this fix again, any time soon.

In other words, loans are going to get harder to get, probably much harder. At least until the dust settles. What does this mean to you? Well, it means you need to be squeaky clean to get a home loan today or in the next year or two. What if you're not?

What I would do if I were thinking about getting a loan today would be to pull my credit report from the three credit reporting agencies and see what problems, if any, it might have. Also, I would take pains to raise my credit score by always being on time for my payments, and also by lowering my outstanding principal on my credit cards and other loans. This will go a long way to making sure you're one of the folks who can get loans in the future, instead of one of the ones who can't.

To learn more about finding the best mortgage for you and your needs, visit my blog, Best Mortgage Guide [http://best-mortgage-guide.com/].

Patricia Pearce [http://best-mortgage-guide.com/] is a consumer advocate and educator. She runs several online sites devoted to empowering consumers to keep more of their money.

Article Source: Patricia Pearce