A Columbia SC cash out refi may soon be a thing of the past, and has in fact, already tumbled from a peak of $320 billion in 2006 to just $32 billion in 2013.
During the housing boom of the mid-2000's, a Columbia SC cash out refi became a popular outlet for homeowners. Homeowners were encouraged to think of their homes as ATM's they could easily withdraw cash from, in the form of a cash out refinance.
Decrease in Columbia SC cash out refi popularity is due to three reasons:
1. A Columbia SC cash out refi is closely tied to an increase in home prices.
Despite jumping 11.5% year-over-year nationally in 2013, inflation adjusted housing prices are still down about 30% from the bubble peak.
In addition, analysts don't expect home prices to continually rise as they did in the bubble years, which could make borrowers less likely to withdraw equity from their homes. Home prices are projected to increase by 4% in 2014 and 2% in 2015 followed by a 2% increase on average in the long term. As a result, many borrowers would still be unable to use a Columbia SC cash out refi due to the lack of home equity.
2. A shift in borrower mentality from using their homes as an ATM.
Homebuyers are making more of a concerted effort to pay down or pay off their debts instead of expanding or upgrading. As lending standards tightened after the crash, borrowers' credit quality has improved.
3. A Columbia SC cash out refi is not always cheap when compared to alternatives like home equity loans.
While the interest rates on a Columbia SC cash out refi are usually lower than those on a home equity loan, they can become expensive once additional loan level pricing adjustments are factored into the equation.
Depending on the FICO/LTV combination, a borrower could pay up to 3% of their mortgage balance upfront or 0.75% additional annual interest rate for a cash out refi. Additionally, cash-outs are not available to high LTV borrowers. Guidelines stipulate that a Columbia SC cash out refi is not permitted for borrowers with LTV greater than 85. Finally, closing costs are required for cash-out refinances, but they are not needed for home equity loans.
Given these 3 factors, it would seem unlikely for the Columbia SC cash out refi to make a comeback or return to pre-crash levels.
For more mortgage tips and information, check out the link to our Columbia SC Mortgage Info under Columbia SC Real Estate Categories to your right.
Think your Columbia SC mortgage data is secure? Think again!
If the ease with which hackers cracked into the financial information of millions of Target and Neiman Marcus customers has you worried about how easily your private data can be lifted from your mortgage company, wait until you hear what a major cyber security firm found out about lenders.
According to HALOCK Security Labs, mortgage companies big and small allow information-sharing practices that put your personal and financial data at grave risk. This goes for your Columbia SC mortgage data as well.
In its investigation of 63 lenders, the firm discovered that seven out of 10 allowed applicants to send their info over un-encrypted email as attachments. Moreover, nearly the same percentage encouraged faxing sensitive data, which is somewhat less dangerous but still not as secure as encryption.
Only 40 percent of the lenders studied offered a postal mail option, and just 12 percent provided a secure email portal.
So how can you be sure your most personal financial information like your Columbia SC mortgage data won't be snatched from your lender? Here are a few tips:
Making Sure Your Columbia SC Mortgage Data Is Secure
Brand awareness. If you are sending anything online, be sure you are dealing with brand names. Hackers follow the path of least resistance, and the big-name lenders tend to have the strongest security measures.
Also, the lender's security systems are only as good as those of its weakest contractor. And the big lenders tend to work with only the strongest vendors.
Look for e-signatures. If a company offers an electronic signature process, it shows a heightened level of security awareness and sophistication.
Avoid un-encrypted email. Sending anything over the Internet invites trouble. But since regular emails can be hacked by anyone, use only password-encrypted email to send your information to your lender. Common sense goes a long way. People are too comfortable with regular email.
Says security blogger Graham Cluley: "If (email) was invented today, no one would use it. It's worth the extra effort to go through the paces of using a secure portal."
Stay away from drop-boxes. Drop-box technologies are fine for most data exchanges, but you have no clue who has access. Keep your private stuff private using encrypted email.
Watch for secure sites. When applying online or sending anything over the Internet, make sure the website itself is secure. Look to see if the URL begins with "https". And as you go from page to page, make sure the frame and URL have not changed. In other words, make sure the "s" is still there. Otherwise, you could become a victim of a phisher looking to steal your data.
Finally, there's this warning from Terry Kurzynski, a senior partner at HALOCK: "Any type of weak link in a system involving sensitive information exposes people to unnecessary risk. It takes months to recover from identify theft and only seconds to log into a secure portal. Do the math."
For other mortgage related tips, click the Columbia SC Real Estate News link to your right under Columbia SC Real Estate Categories.
When it comes to Columbia SC mortgages, it appears that adjustable rate loans are becoming more popular once again.
Adjustable-rate mortgages, whose rates can jump after a few years, are believed to have been one of the biggest culprits of the housing crisis. However, banks say they are concentrating on making the loans to buyers with strong credit who are looking for larger loans — not to "sub-prime" buyers who took out loans they could barely afford.
A report in the Wall Street Journal says ARM's comprised 31 percent of mortgages in the $417,001-to-$1 million range in the fourth quarter of 2013, up from 22 percent a year earlier. ARMs made up 61 percent of mortgages of more than $1 million.
More Columbia SC Mortgages Shifting to ARM's
It would seem that more and more Columbia SC mortgages are shifting to the ARM's, especially among first time homebuyers looking to get out of the rental market.
As fixed rate Columbia SC mortgages continue to increase, it is expected that more and more borrowers will look at adjustable rate mortgages to keep payments lower.
It is expected that 2014 is going to be the year of the first-time homebuyer, and keeping mortgage payments as low as possible is one driving factor that seems to be creating all the renewed interest in ARM's.
While rates on Columbia SC mortgages have continued to slowly rise over the past few weeks, they still remain affordable and many first-time buyers say they still plan to make a home purchase this year.
Get more news about Columbia SC mortgages and news that affects mortgage rates by clicking the Columbia SC Real Estate News link to your right under Columbia SC Real Estate Categories.
Most people planning to buy a Columbia SC home will ultimately be shopping Columbia SC mortgages as well. Columbia SC mortgages can vary from lender to lender, so it pays to compare, and make sure you're getting the best deal.
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To stay on top of market changes and conditions that may affect getting Columbia SC mortgages in 2014, check out our other articles by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.
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To stay on top of market changes and conditions that may affect getting a Columbia SC mortgage in 2014, check out our other articles by clicking on the Columbia SC Mortgage Info link to your right under Columbia SC Real Estate Categories.