Essentially refinancing replaces the current mortgage acting as a new loan. On record the home will have only one mortgage even if that mortgage was refinanced. Refinancing, ideally, lowers the monthly mortgage payment by taking advantage of lower interest rates.

However, not everyone should refinance since it can very well cost more money then to stick with the old loan.

While you should discuss with your lender whether refinancing is a good idea or not there are some factors to consider.

Length Of Current Mortgage

For those homeowners who have already paid a good amount of their previous loans should not refinance. Refinancing often resets the duration of the mortgage and if you have already paid off 20 years on a 30 year loan then you just may not stay in that home much longer.

Refinancing may bring a new 30 year mortgage so ask yourself if staying for 60 years in one locations is really feasible or desirable.

All About The Equity And Credit

Home equity is the driving factor in many loans and mortgages. If you have already borrowed more then 80% of the equity of your home then refinancing is going to be costly and rather ineffective.

Credit scores will also play major role in refinancing. If your credit score is worse off then what it was during the first time you took a mortgage then you will find that refinancing will help those payment only a little and the initial costs will just not be worth it.

Delinquent payments, credit card debt, medical bills, and other areas that affect your credit need to be taken into consideration before refinancing.

Do You Live To Spend

Refinancing is a great way to get quick cash for credit card debt which is a very common tactic for home owners. However, if you plan to use refinancing to this end then you may want to reconsider. While you are taking care of a short term problem you are now burdened with a mortgage that may only have slightly better rates then the old one and may have a longer duration at that.

Experts advise to curb those spending habits before refinancing and make sure you can live without credit cards.

You will also need to consider the overall cost of the refinancing procedure to see if it is cost effective. Set well defined goals about why you want to refinance anyways. Is it just to pay off credit card debt or is it to pay for remodelling.

You have to make sure that refinancing is actually going to be worth it in the long run instead of focusing only on the month to month payments. As soon as interest rates take a dip mortgage companies are quick to push refinancing, before you jump aboard the band wagon run the numbers and look at the big picture.

• Mortgage Delinquencies Skyrocketing
• Fannie Mae Suffers Setback

The statistics indicate that credit cards are preferred to both cash and checks.  In 2003, electronic payments from credit and debit cards rose to 44 billion—up from 15 billion in the mid-’90s.  In addition, from 1999 to 2005, credit card terminals basically tripled in number to 6.8 million.

Why the avalanche of credit card transactions? Consumer security might be a top reason.  It is simply safer to carry and use a credit card than to carry cash—which can be stolen and used without a trace.  In addition, it’s a great deal easier for someone to get away with using a stolen check than using a stolen credit card.

Some observers, however, believe that electronic payments could drive up the price of goods, since each transaction carries a fee which may then be passed onto the consumer.  However, it may just be that consumers are willing to live with higher prices in exchange for the convenience that credit card offer.

Businesses see higher credit card usage as a victory because consumers tend to spend more when they’re using plastic.  And that means a better bottom line for retailers and other businesses.   In addition, according to the Federal Reserve, processing credit cards is far less expensive than processing checks—another plus for business.

Moreover, industry observers predict that new security measures are on the horizon—procedures that could make credit card use even safer for both businesses and consumers alike.   With the myriad of advantages that credit cards offer, usage of the cards may continue to skyrocket in the years ahead, moving our nation closer to the “paperless society” envisioned by trend-watchers.

• Profiting from Holiday Giveaways
• Credit Card Company to Offer New Consumer Education Program

One of the biggest trends is discounts for applying for in-store credit cards.  Macy’s and J.Crew are particularly well-known for such promotions.  Such programs can provide consumers with instant savings when they need it most—during the all-important holiday shopping season.  If you’re in the market to make some large purchases, such discounts can be particularly handy.  Even online outlets such as Amazon have been known to offer discounts for applying for credit cards.

However, financial experts caution that consumers must be wary of the high interest rates that often accompany store credit cards.  In fact, the rates can be as high as 22%!  You can avoid the problem by paying off your credit card balance each month or simply applying for a low interest credit card. Alternatively, you could take advantage of the many rewards credit cards available at Credit Cards Info.

Another special holiday promotion is delayed billing.  Retailers such as Wal-Mart and Petco offer consumers the opportunity to postpone their bills for 90 days.  With such a promotion, you can avoid several months’ worth of finance charges.  In the meantime, you can apply the money you save to other pressing bills.

However, the drawback to paying later is that, if you miss a payment deadline, you may end up paying higher interest rates.  In fact, the rates can skyrocket to nearly 20%.  You also lose your grace period, adding to the financial strain.

The bottom line, then, is that consumers need to be cautious in taking advantage of holiday discounts.  Used wisely, they can be a blessing - misused, they can easily become a curse.

• Credit Cards Rise in Popularity
• Credit Card Company to Offer New Consumer Education Program

The crisis seems to be the result of the fact that many homeowners found themselves unable to sell or refinance their houses.

The delinquencies increased to 5.59%, which was the highest such figure since the year 1986, according to a report by the Mortgage Bankers Association.  Meanwhile, foreclosures hit a record high for the 2nd consecutive quarter.

Because of all the foreclosures, there’s a glut of available houses on the market.  Sales of both new and existing homes are expected to decrease to 5.09 million in 2008.  That would be 32% below the 2005 high of 7.46 million.  At the same time, lenders are tightening standards for homeowner loans, making it more difficult for prospective buyers to purchase homes.

However, the Bush Administration is trying to alleviate the crisis through a 5-year freeze on some subprime loan rates.  Numerous homeowners might be in danger of losing their homes were it not for the freeze.

Approximately 20% of adjustable rate subprime loans experienced late payments during the quarter.
The crisis appears to be worst in California and Florida, two states that have been hard-hit by the housing slump.  Meanwhile, housing permits in the U.S. have dropped 5 consecutive months, decreasing to a 14-year low, according to a report by the U.S. Commerce Department.

Housing experts do not expect an end to the current housing mess until the middle of 2008.  It’s unclear at this point, however, whether the housing crunch will lead to an all-out recession.  Officials with the Federal Reserve Board have said they plan to do everything possible to keep recession at bay.

• To Refinance Or Not To Refinance That Is The Question
• Fannie Mae Suffers Setback

Under the agreement, GE Money will provide an affinity credit card to alumni of San Diego State University. 

According to the leader of GE Money’s Personal Finance business, the card offers a specialty rewards program that has been designed specifically for the university community.  The card will be offered to more than 150,000 of the school’s alumni.

The pact is an outgrowth of GE Money’s efforts to increase card presence in the popular affinity credit card market.  The card will be a MasterCard featuring the San Diego State University name.  Two variations will be offered—an alumni card and an athletics card.  Under the program, cardholders will receive one point for each $1 spent.  Points can then be used for San Diego State University merchandise, season tickets, travel cards, and gift cards.

Alumni will be advised of the program through direct mail, ads on alumni and athletics websites, and athletic events.  GE Money will share a portion of the profit earned with the university’s alumni association, which supports athletics, university relations, and development programs.

Thousands of loyal San Diego State alumni are expected to use the cards.  With every transaction, they’ll be showing their allegiance to the school, which was founded in 1897.

GE Money has some $190 billion in assets and is considered a leader in the credit field.  The company provides services in 55 countries around the world and is based in Stamford, Connecticut.  Its products include not only credit cards, but also personal loans, bank cards, auto loans and leases, mortgages, corporate travel and purchasing cards, debt consolidation, home equity loans, and credit insurance.
For more information about GE Money and its services, visit  www.gemoney.com.

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• Credit Cards Rise in Popularity
• Profiting from Holiday Giveaways
• To Refinance Or Not To Refinance That Is The Question
• Mortgage Delinquencies Skyrocketing
• Credit Card Company to Offer New Consumer Education Program
• Fannie Mae Suffers Setback

Bank of America spokesman Bruce Hammonds told the Associated Press, “Our research shows that if we equip consumers with this account information, they become more empowered to manage their finances and more satisfied with their banking experience.”

Financial experts say the concept behind such educational programs is quite simple: the better informed consumers are, the more likely they are to make wise decisions regarding their finances. Because of the complexity of credit card accounts, many customers may be unaware of the various “extra” charges they may encounter on their monthly bills. If they know in advance what to expect, they are less likely to incur charges that they cannot afford to pay.

Consumer education programs also make sense from the viewpoint of credit card companies. Informed customers are often happier customers—and happy customers are more likely to build a solid relationship with a credit card company. In the end, consumer education can lead to enhanced profits for the credit card issuer.

As part of its consumer education efforts, Bank of America is also introducing special e-mail and cell phone alerts. These alerts will let consumers know when they’ve come close to reaching their credit card limit—or when their monthly payment is due. Such alerts may enable consumers to keep a closer watch over their accounts, making it less likely that they will max out their credit cards.

Still, some financial experts may argue that credit card education is not enough—that credit card issuers should work to reduce the amount of fees they charge. However, in today’s highly competitive credit card climate, companies may balk at reducing or eliminating fees.

The bottom line is that such fees help credit card companies make money—and, after all, that’s what they’re in business for.

• Credit Cards Rise in Popularity
• Profiting from Holiday Giveaways

The stock market plunge came amidst news that the lending giant might have understated its credit losses.  Shares of Fannie Mae declined 5.5% to $40.69 one day and dropped 17% the following week.  

Fannie Mae owns or backs about 20% of the U.S. home loan market, which has been rocked by a slew of foreclosures and defaults in recent months.  The way that Fannie Mae works is this:  the company purchases mortgages from other lenders and then charges a fee to reinvent the loans as securities.  When defaults and foreclosures increase, Fannie Mae and the smaller Freddie Mac experience losses since some of the loans are considered investments.

Recently, Fannie Mae reported a loss during the third quarter of nearly $1.4 billion.  That included more than $650 million in “unrealized losses” which were blamed on decreases in the market value of its loan portfolio.

Fannie Mae’s chief financial officer has contended that the organization’s new approach to spotlighting realized losses was accurate.  But other financial experts are questioning Fannie Mae’s methods.  As a result, the financial markets remain skittish about the lending powerhouse.

This is certainly not the first time that Fannie Mae has encountered controversy over its accounting methods.  In the year 2004, regulators discovered the lender overstated profits during the period from 2001 to 2004.   As a result, the price of shares of Fannie Mae stock dropped substantially.

Now, shares of Fannie Mae have dropped to their lowest point in more than 10 years.

Meanwhile, observers fear that the problems within the housing market could lead to an all-out recession.  House prices have plummeted, and prospective home buyers are finding it increasingly difficult to secure loans.  Experts predict the housing market won’t recover until the middle of 2008.

• To Refinance Or Not To Refinance That Is The Question
• Mortgage Delinquencies Skyrocketing