Feeling
the pressure of a soon-to-reset second mortgage? You're not alone.
According
to Black Knight Financial Services, more than 3 million U.S. homeowners will
experience a second mortgage recast within the next few years. A "recast" is when the initial
10-year, interest-only period of a home equity line of credit (HELOC)
ends, and the loan is converted to a fixed-rate, amortized loan at a new
interest rate over some number of years -- usually 15.
The
effects of a recast can be large. The typical U.S. household will see
payments increase $261 per month. A
$261 increase won’t break most folks, but if they had a larger home equity
loan, say a $150K loan, the payment could be over $1,000 – that could put some
people in real trouble.
The
good news is that, because the housing market is strong and because current mortgage rates are low, homeowners
with an existing second mortgage are in good position to refinance.
A
refinance of a second mortgage can eliminate the possibility of a recast; or,
at least, stave it off for another 10-year draw period. If you know of one of your clients that is in
trouble, we’d love to help them out.
Based in Folsom, California, Sierra Pacific Mortgage has 144
offices nationwide. The Easterbrook Team
at Sierra Pacific is associated with the #1 office in the nation for SPMC for
2015. We want to thank you so much
for the support. Come by and visit our
office at 806 Bidwell Street in Folsom.
Keep the loans coming and we’ll keep closing them at lightning speed
with a positive, smooth, and transparent experience. Call us at (916) 850-6050.
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