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Interest rates have gone down, and now many are wondering if it is really that time to refinance their home. The answer is YES. Not all situations are ideal to do a refinance, however there are things to look at with regards to entertaining the idea of refinancing your home right now.
According to ABC news, here are some common questions consumers might want to know before trying to refinance their home.
1. How much will a refinance cost?
2. Will a refinance save you money?
3. What kinds of loans are out there?
4. What are some common pitfalls?
5. What is the difference between a loan modification and a refinance?
6. If I have a prepayment penalty, should I still refinance?
7. If everyone wants to refinance, is the lending industry able to handle this rush?
Leadpile Lead Exchange generates a large volume of refinance (homeowner), loan modification, debt and home purchase leads. These are all consumers that are in this process of trying to determine what their best option is. No matter what the decision is, asking questions is key to knowing what is the best option for you and YOUR situation.
In a continuing effort to research all the options consumers have available to them, I came across a type of loan that I have never seen before. The newest and latest way for consumers to get cash is by taking out a cash advance from their home. Currently, consumers that are age 65 and older have often looked at the option of doing a reverse mortgage. This is basically the consumer taking out a loan on their home, but the loan not being paid back till after they pass away. However, it appears there might be another option available to them.
Something new that lenders are looking at is offering consumers cash advances on their home. According to The New York Times, “Owners 65 to 85 with good credit who live in homes valued above $400,000 (above $500,000 in New York and California) can receive a payment of up to 15 percent of a home’s equity.” Something like this costs the consumer no closing costs unlike a reverse mortgage. There are certain stipulations the consumer has regarding the sale of the home, however the simplicity seems to be there compared to doing a reverse mortgage or other lending options. Yet is this a logical choice for consumers? Not everyone has a home valued above $400,000 either.
The options that homeowners now have are:
2. 2nd mortgage or lines of credit
3. Reverse mortgage
4. Home cash advance
5. Loan modification
and what’s next?…………………………….
Consumers are looking for anything and everything they can do to survive. Does this mean a potential new lead type for Leadpile Lead Exchange? Let’s wait and learn some more about this new option available.
Who could ever imagine Starbucks famous for those fabulous Lattes and Frappuccinos we all love, White Mocha being my personal favorite, would be closing down 600 stores by 2009 according to NY Times. Initially, Starbucks plans were to only close 100 stores but with the housing crises that affected California and Florida the hardest, which is a large region that Starbucks covered, Starbucks has definitely been struck as well.
Starbucks is now closing 70% of their newest stores that have been open less than 3 years. As of Sept 30th, 2007 they had 6,973 stores worldwide. That’s leaving 12,000 people unemployed, doing the math its 7% of their global workforce. Sad to see so many cheerful employees go.
So not only is gas pricing going up, housing going down, cost of food increasing but now Starbuck is shutting down doors. Well, with a cup of coffee averaging $4-$5 society simply cannot afford it.
So your asking how is this related to the Lead Industry?
JOBS – More Home Based Business Opportunity Seekers
DEBT – Credit card debt will rise as some will continuously charge their credit card to get by.
MORTGAGE- More consumers taking equity and refinancing to pay bills.
PAYDAY LOANS – Loosing your job is not easy, the average person lives paycheck by paycheck more payday loan request will be demanded.
INSURANCE – More demand for health insurance and life insurance coverage.
BANKRUPTCY-More consumers filing bankruptcy buried in debt.
Consumers will be in big need of your help! Starbucks is just an example of how the economic struggle is affecting not just individuals but companies as well. A lead exchange will help companies offer services to consumers in need. More demand in the financial space that’s for sure.
According to Bloomberg, Mortgage applications in the U.S. declined last week, led by a slump in refinancing as borrowing costs surged. Sales will probably remain depressed as lenders restrict credit, and concern over inflation boosts mortgage rates. The highest mortgage rates in a year may have precipitated the slump in demand. The average rate on a 30 year fixed-rate loan rose to 6.57, the highest level since June 2007, from 6.24 percent.
So what are Mortgage Companies to do?
They have one of two choices… Go big in a downturn, get small and ride it out, or close their doors.
What does a Lead Marketplace do for Mortgage Companies right now? Do what they have always done…Let the demand drives the lead…simple and easy.