Avoiding Mortgage Problems by Refinancing

By Karen Lawson
Local Lender Columnist
Jun 15, 2007
Foreclosure rates in Florida are among the highest in the nation. If you're concerned about rising payments due to an adjustable rate mortgage (ARM), you may be able to stabilize or reduce your payments through refinancing. Depending on your home equity, it may also be possible to take additional cash out for paying off credit card debt. If you're living paycheck to paycheck, accessing home equity to get back on track can help avoid credit problems.

Current Value is Key to Refinancing

Home equity is the difference between what your home is worth and how much you owe in mortgage loans. You'll need to determine your home's value to get an idea of how much equity you have. Online home value calculators can give you an idea of your home's value, but you should contact your lender and ask about refinancing options.

Although it's possible to refinance if you've had late or missed payments, you'll likely have to pay a higher interest rate. Avoid trouble by contacting your mortgage lender for help. If refinancing isn't feasible, you may qualify for a home equity loan to help eliminate high interest consumer debt. Over time, this strategy can help you rebuild your credit history by showing fewer accounts with balances. If you don't have enough equity in your South Florida home to qualify for refinancing or a home equity loan, you can contact a non profit credit counseling agency for assistance.

Source
CNN Money Real Estate

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds a Master's degree in English from the University of Nevada, Reno.