Should I Cash In on My Home Equity and Refinance My Current Mortgage Before the Bubble Bursts?

A report in the Los Angeles Times, shows: "If the price of houses in California rose by 17 percent in 2003 and reached 22 percent in 2004, a strange thing: Instead of home ownership decreasing because fewer people could afford houses, it rose at record levels. "

Basically, people in California are using interest only loans and payment option to purchase more home than they will actually be able to afford, and the dangerous game when the FMV (fair value begin) to fall. "AbundantForeclosures could be a downturn in the housing market throughout the spark, leading to the long-feared bursting of what some call the real estate bubble "shows Streitfeld LA Times article.

An article in the San Diego Union Tribune, shows higher interest rates to stop potential buyers from signing on the bottom line. These developments are forcing homeowners to drop their prices.
The Federal Reserve shows, assessed real estate "value of 145% of nominal GDP in Marchwhile stocks and mutual funds were worth 82% of GDP.

“The plan is for the feds to keep raising rates until inflation comes down.’ says mortgage broker Mike Johnson. “Expect higher interest rates for refinancing and home equity loans through 2006.” The balance of the bubble means as interest rate’s climb, those adjustable interest only mortgages climb as well. Two percent interest jump equals a 40% percent higher payment. If home prices start to fall, when those Convert interest only loans, homeowners prior to payment in full on a base figure may be higher than the actual FMV of the same building. In other words, they get the loan closed. The refinancing will not help because it does not borrow the shares, or if property prices fall, they

As interest rates rise, proposes to find more than a mortgage expert homeowners a way to refinance with a fixed rate mortgage. Probably you will probably set up in your home equity. You can checkNow drag the overthrow of the equity in the case of house prices. Bare minimum, establish a home equity line of credit. Lock in a fixed interest rate, equity investing, and use the money to set out a potentially higher payment. Then, if the bubble does not burst, and falling interest rates, while rising real estate prices ... Refinancing!

Nick Rian is an award winning journalist who has written many real estate and home financing articles online. You can learn more from working on Nick's home equity andSecond mortgage loans to refinance and more information about mortgages. Based on the current interest rates or credit Second Mortgage Loans California Home Mortgage Loans, if you want to talk to refinance a loan professional for a cash out loan.