10.26.08
Posted in Advice - Home Equity Loan Rates, Advice - Mortgage Loan Rates, Advice - Loan Rates, Advice - Refinance at 5:31 pm by Ken S.
Doesn’t it seem like EVERYBODY has bad credit? Big businesses, small businesses, banks, super-famous celebrities, and regular every day people. Some of the largest financial organizations in the country are filing bankruptcy or asking the government for help. Merrill Lynch, Lehman Brothers, and AIG Insurance all needed loans or they were going to have to file bankruptcy. Wow!
But check this out… When big businesses have bad credit, they get bailed out by big banks, other big businesses, or the federal government. These businesses get approved for multi-million and billion dollar loans, they get the lowest interest rates possible to keep them from going under. They may have to pay the ’Fed funds rate’ or the ‘discount rate’. According to Bankrate.com, as of 10/22/08, the Fed funds rate was 1.5%, and the discount rate was 1.75%. These low interest rates give them the opportunity to structure affordable repayments, even though they have bad credit.
Now when consumers are offered loans, those with the BEST credit are approved for low interest rates. As of this post, consumers with excellent credit could qualify for a 15 year fixed rate home loan with the low loan rate of 5.59%. People with bad credit, however, could pay home loan rates of 9% or more.
Let’s do the math. If you have good credit, a 15 year mortgage of $100,000 with a 5.59% interest rate would carry a monthly payment of $821.87. If you have bad credit, that same $100,000 mortgage with a 9% interest rate would carry a payment of $1014.27. That’s an extra $192.40 per month you have to pay just because of your bad credit score. Over the course of the loan, you will have paid an extra $34,632 more than the guy with good credit.
Ok, stick with me now…. Big businesses with bad credit get low interest rate loans. Consumers with bad credit get high interest rate loans. What gives? ‘Big business’ is a reflection of the economy. Big businesses have bad credit. Consumers are a reflection of the economy. Consumers have bad credit. So if everybody has bad credit, why is it that big businesess get a break with these low loan rates and consumers are left to struggle to pay even more for their loans? If everyone has bad credit, why don’t banks make it easier for EVERYONE to repay their loans. Having to pay an extra $200 bucks a month could mean the difference between making your mortgage payment, and not being able to make your mortgage payment.
Well I tell you one thing, LowRateSearch.com will continue to be diligent in offering consumers lots of help finding low loan rates, whether you have excellent credit, good credit, okay credit or even bad credit. And if you have bad credit and want some help repairing it so you can qualify for low rates too, we will match you with a legitimate credit repair company and/or a professional debt negotiator to help you get take control and get your credit report back on track. The higher the credit score, the lower the interest rates you can qualify for. We are here to help you with your bad credit repair so you too can get the lowest rates.
Ken S.
© 2008
Ken S. is the founder of www.LowRateSearch.com and makes it the company’s mission to help people save money with low loan rates, affordable insurance, and travel deals too.
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09.08.08
Posted in Advice - Home Equity Loan Rates, Advice - Mortgage Loan Rates, Advice - Auto Loan Rates, Advice - Loan Rates, Advice - Refinance at 6:40 pm by Ken S.
Hi everybody!
Exciting news. LowRateSearch.com has partnered with Bankrate® to help you find low loan rates. Now you can see the latest loan interest rates for different types of loans including mortgages, refinance, home equity, and auto loans.
More info on auto loans:
More info on mortgages:
More info on home equity loans:
For more low loan rates, low interest rates, low credit card rates, low insurance rates, and low travel rates, visit our homepage at www.LowRateSearch.com. We search for low rates, so you don’t have to.
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01.30.08
Posted in Advice - Refinance at 10:10 pm by Ken S.
Lower Fed Rate Helps Mortgage Refinancing - For the second time this week, the Federal Reserve reduced the federal funds rate by one-half point. This lower Fed rate helps mortgage refinancing. How? Here it is in a nutshell.
Think of money as an entity. It moves in, out, and around the economy constantly through purchases, returns, loans, investments, payments, re-payments, etc. At any given moment, hundreds of millions of people around the world are moving money around. To keep up with this movement, banks lend and borrow money, to and from each other, on a short term basis (usually overnight). The Federal funds rate is the interest rate the banks charge each other when they lend money to each other. Today, that interest rate is 3%.
So, the lower Fed rate helps mortgage refinancing like this: After the interest rate banks will charge each other is established, the banks establish the lowest rate they are going to charge to qualifying consumers and businesses. This rate is called the prime lending rate, the benchmark rate for consumer and business loans. When the Fed funds rate was lowered to 3%, banks announced they were lowering the prime lending rate from 6.5% to 6%. This has been the lowest prime interest rate since the spring of 2005.
If you remember, 2005 was back when everybody was buying a house or refinancing. Why was that? Because back then, people were getting really low mortgage and refinance rates, and their payments were affordable. Well that time is back and it’s happening now. Save yourself some money and take advantage of the lower rates while you can, the lower Fed rate definately helps mortgage refinancing.
- Ken S.
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01.29.08
Posted in Advice - Refinance at 11:40 pm by Ken S.
If you have a mortgage and good credit, research says now is a great time to refinance your loan. Thanks to the lowest mortgage rates in nearly two years, it is a good time to refinance your home loan rate to lower your payment. Adjustable and interest-only loan rates are resetting, and many applicants can take advantage of fixed rates in the 5.5 % to 6% range - often with no out-of-pocket closing costs. Jay Brinkmann of the Mortgage Bankers Association says that “no-cost” refinancings (where the lender rolls your transaction costs into your interest rate) “are absolutely an option” for many people.
Anyone whose current mortgage loan rates are 6.25 % or more could benefit from such an affordable refinance arrangement. Though specifics vary from lender to lender, many mortgage firms will offer affordable zero-out-of-pocket loan deals in exchange for an extra quarter-point on the interest rate. In other words, a borrower who has a mortgage loan with a 6.5% fixed-rate loan would refinance into a new, lower, more affordable 6% interest rate loan without paying any fees at closing. The lender would just include 0.25 percentage points onto the prevailing 5.75% rate.
Some lenders report that more than 60% of the home loan applications this month were refinance loan applications. My advice? Take advantage of the lower interest rates, get a low affordable payment, and save yourself some money. I did.
- Ken S.
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