SCAM ALERT: Recently Firms have popped up Guaranteeing to modify your existing mortgage with lower rates and lower balance. They charge up to $5000.00 up front, most of the contracts I have seen make the money non-refundable. This is a SCAM, I have spoken with the major loan servicers and law enforcement. If you are in trouble on your current mortgage, call your lender. In most cases they will help you with what is know as a Loan Modification Agreement, to help you save your home. Lower rate, possibly lower balance, and it's legal and FREE. Don't become a victim. Check out my Consulting Company for more information. 

When tax law changed to eliminate tax deductions for interest on the majority of consumer purchases (this happened in 1996, ) the Home Equity Loan was born (otherwise known as Refinance Mortgage Loans) because the interest that one paid on home equity loans was still exempt from the blossoming law for up to 100k for jointly filing taxpayers making marriage a dandy write-off. In the world of mortgage loans there are two types of loans: fixed and variable rate. The rates on Variables (ARMS) can change anywhere from once  a year all the way to ten. With your fixed loans the monthly principal as well as the interest will remain the same for the life of the loan. The adjustable rate loans typically begin lower making your monthly payments smaller at first but will climb up, gradually, to a predetermined "cap" dependent on current market conditions. However about five years ago loans came to market called "Option or Pic-a-Pay Arms" These loans had a payment based on a 1 or 2% rate, enabling people who could not afford a home to purchase one. If you payed that low payment each month the balance on your loan went up every month.....a lot, then in a year or so your payments doubled or more. Property Values soared for a while, now all these tricky risky loans, No Income loans and Sub-Prime loans all are going in to foreclosure at the same time. Property values are plummeting, and Americans are losing their homes in record numbers. Due in part to Realtors and Mortgage Lenders that didn't care at all about their client, only the money.

Now you can always cash out the equity of your home, typically up to 90% above the value. Though it sounds good right now you are entering certain waters that can see you drowning in more debt over time. Remember right now values are still dropping.

Avoid reloading. Mortgage loans and cashing out your equity is very appealing. You can pay off your debts and your credit cards freeing up all of that money so you can go off spending again getting back into that boat. You create what is known as accelerated borrowing by paying off a debt to use it to pay off another debt, creating even more of the same. Doing so takes away your collateral. When that happens if your job gets rid of you or your income decreases or markets plummet then you can face foreclosure. Debt consolidation is a pitfall all its own as you're making an unsecured debt a secured one which puts the home in jeopardy.

Being in debt is a hardship. With hardships come people waiting to take advantage of you, offering you the moon to remove the debt. Scammers are all over. These people will target older people, persons with low income or bad credit holders. They will base their loans on the home equity rather than your ability to repay. Never falsify information. Never go with anyone who doesn't provide disclosures or those who tell you to not worry about reading them. Avoid those who promise you one thing then it's different in the paperwork.

Always get the promise in writing ! With all disclosures. Call me, I will be glad to reveiw all your mortgage needs with you.

Arthur Nelson Rodgers II

Check out my Blog at: www.anelsonrodgers.com