Many times I see consumers refinancing and consolidating large amounts of credit card debt into their new home loan(s).  Well this may or may not be a smart idea, it depends on the individual’s situation.  First thing to look at is the available equity in the home.  You don’t want to be adding in credit card debt to a home loan if you do not have enough equity.  In this market your home’s value could dip and you would owe more than its worth.  So you want at least 30 - 40% of equity in your home to consider that. 

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  Recent reports have indicated an increase in new home sales (new construction homes).  This bodes well for the upcoming year.  2006 wasn’t the best year for new home sales or sales in general.  However with these new reports from 4th quarter 2006 and the current interest rates lowering 2007 could show increases in both areas. 

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Many publications and web-sites have cited an increase in the demand for home loans, specifically refinances. This is most likely caused by one of 2 reasons. First, rates have trended down over the past few months with speculation that they will remain at their current levels. Second, there are a great deal of ARMs (adjustable rate mortgages) that are hitting the adjustable portion of their loans. In a majority of those cases the adjusted rate is going to rise so the borrowers are looking to lock into a lower fixed rate.

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This has been a huge debate for years, should you continue renting or try to buy something. You can argue for each side.

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If you have an ARM (Adjustable Rate Mortgage) and it will be adjusting in the next few months chances are, if you took out this loan 2 or 3 years ago, the rate will adjust higher. Therefore it could be time to look into locking into a long term fixed rate loan. You can save yourself a great deal of money per month by locking into a fixed rate payment.

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