New Home Loans

With a sluggish economy, falling interest rates on mortgages, and projections for dropping home prices, it could be an excellent time to look into a home loan in 2007. According to an April report by Interest.com, fixed-rate mortgages saw a drop on 15 and 30-year interest, and so did 30-year jumbo home loans. Adjustable-rate mortgages rose slightly, but homeowners are finding refinancing rates to be comparable to last-year's interest levels.


Before taking any step to secure a home loan, it's critical to evaluate your ability to make payments. The San Francisco Chronicle reports that California foreclosures are up 802 percent, setting a ten-year high. Rising adjustable mortgage interest rates are a main cause of mortgage default when homeowners fail to plan for possible rate hikes, the Chronicle reported. That's why a mortgage calculator can be a valuable tool for anyone looking into a new home loan or mortgage refinancing.


Calculating Your Mortgage Payments
When looking into a refinancing or new home loan, you'll need to consider how confident you are in terms of future income, interest rate changes, and your ability to pay. A mortgage calculator provides a rough estimate, but you'll need to work with prospective lenders toward securing a loan that makes sense for you.

Variables in any comprehensive mortgage calculation include knowing about the community where you intend to buy or refinance an existing mortgage. You'll need to assess your outstanding debt, your gross monthly income, your future earnings, the loan amount, annual taxes and insurance, the principle balance, interest rates (if fixed) or initial rate (if adjustable), and mortgage length or loan term.


Dropping Home Prices Stimulate New Loans
Interest.com reports that housing prices are expected to decline for the second straight year -- the first time this has happened since 1968. There are predicted 2 and 3 percent drops this year, and the trend is expected to continue for at least one to three more years.

The recent collapse of high-cost subprime mortgages may mean that housing demands will drop, making new purchases affordable. As for average interest rates reported for April 2007, the fixed-rate 30-year mortgage loan was at 6.27%, down from 6.64% last year. The fixed-rate 15-year mortgage loan averaged 5.99%, compared to last year's 6.27%.