| The housing market in LA appears to be bucking | | | | Essentially, refinancing is taking out a new |
| the trend in the rest of the state and average | | | | mortgage loan. As with any loan, before taking it |
| prices are on the up. So although many experts | | | | out, do your research and try and work out what |
| thought that the downturn would affect the | | | | your objectives are. The main reasons for |
| whole state, the high priced market in LA is | | | | refinancing are: |
| holding steady and the mid to low ranges are | | | | - Release equity in your home into cash |
| holding up. Sellers have learned the lessons from | | | | - Lower your current interest rate and thereby |
| 2006 and are pricing their homes realistically which | | | | reduce your monthly payment |
| is enticing buyers into the market. This is a | | | | - Consolidate your outstanding debts into one |
| positive sign as it shows that demand is still there. | | | | payment |
| The refinancing market is also looking healthy. | | | | - Convert ARM into a permanent fixed rate |
| Although the sub prime sector is getting all the | | | | - Convert fixed rate into an ARM |
| headlines at the moment, the fact remains that | | | | - Eliminate Mortgage Insurance |
| the vast majority of people who buy a house do | | | | The refinancing market has changed and lenders |
| so with a straightforward mortgage. Only 11% of | | | | are far more selective and more careful about |
| California sub prime loans are delinquent which is a | | | | who they lend to now. The days of easy credit |
| small percentage. The rest of these people will be | | | | loans are over and people have to expect more |
| looking to refinance to take advantage of better | | | | scrutiny from potential lenders. Some people may |
| rates. This means that California refinance loans | | | | find that their credit status has changed in the last |
| are still in high demand. Some owners may feel | | | | couple of years. Due to the hammering that |
| that this is the best time to refinance not only to | | | | some lenders are taking from the sub prime |
| lower their current rate but also to release some | | | | market, lenders are getting tough when looking at |
| cash from their property for debt consolidation or | | | | loan applications. We are beginning to see a credit |
| home improvement. | | | | realism entering the market. |