Many of us may know a little about refinancing our homes, or may have heard of the savings it can bring, but many homeowners still do not know how to refinance, are scared to refinance or do not know if they qualify for refinancing. Due to the housing market struggle, many homeowners may be missing out on millions in savings because of refinance issues. Here are some reasons to refinance if you qualify, to help save you money now and in the future.

Some homeowners do not qualify for refinancing because of falling home prices leaving people with little if any equity at all. However, around thirty-seven percent of all borrowers who have thirty year fixed rate mortgages have rates of six percent or higher and many of these borrowers could reduce that rate by a full percentage if they refinanced their homes at the current rates of about five percent. Also some borrowers that refinanced their homes in 2009 will save about $3.4 billion total for that year and an additional 17.2 billion over the next five years.

Due to home prices falling and home values dropping however, most people owe more on their home than it is worth and have little or no equity, making refinancing nearly if not completely impossible.  Also bank fees and other charges are turning many homeowners away from even thinking about refinancing their homes and the ones that are refinancing seem to be the ones that need it the least.

There is a little light of hope though for those having trouble refinancing; the Obama administration has decided to extend its program to help those homeowners with little or no equity in order to make refinancing easier and to make a possibility for many people. Also, other programs are being talked about to help struggling homeowners be able to refinance and save money.

It is important to refinance if you can, and if you do not know how, start doing some research and asking questions, because it could save you money in the long run. With these hard times, many of us need all the money and help we can get.

Independent housing economist Tom Lawler, who has pointed out frequently that his dog Kita could have qualified for a mortgage at the height of the boom — despite having a low “Fido Score” — is arguing now that prices for low- and mid-range homes are stabilizing.

He says they will continue to do so as the foreclosure rate declines for middle-income home owners. Lawler attributes that to the “stickiness” of home prices, which he defines as slow to adjust downward because stable home owners don’t need or want to sell immediately.

In previous downturns, driven by regional unemployment, home prices fell slowly, Lawler says. This time he argues that things happened a lot faster because banks that owned foreclosed properties sold them aggressively. That forced prices down much faster than they fell in previous downturns.

Source: The Wall Street Journal, James R. Hagerty (07/22/2009)

Housing confidence is up amid increasing evidence that the market is turning around.

The Adversity Index from MSNBC.com and Moody’s Economy.com reported signs of a turnaround in 33 of the nation’s metro areas.

While that’s less than 10 percent of all metro areas, it’s still significant, says economist Andrew Gledhill of Economy.com. “There are signs out there that builders are growing modestly more confident about their prospects,” he says.

Vallejo, Calif., where housing starts are up 440 percent compared to a year ago, leads the list of improving metros. In Longview, Tex., housing starts increased 263 percent. Others metros at the top of the list are Lawrence, Kan.; Ann Arbor, Mich.; Kokomo, Ind.; and Clarksville, Tenn.

Housing prices are also increasing in 140 metro areas compared to a year ago. The greatest increase was in Elmira, N.Y., where prices were up 10 percent compared to a year ago.

Source: MSNBC, Bill Dedman (06/19/2009)