Home Refinancing and the Mortgage MomsIn many households, financial decision-making is closely tied to the nation''s economy, which, in turn, fuels a majority of our social and political issues. Industry analysts recently identified an important demographic whose voting clout could be crucial to upcoming political campaigns, the so-called "mortgage moms." When it comes to major purchases or home refinancing decisions in today''s economy, the female head-of-household (or co-head) plays a key role and should not be taken for granted.
According to a recent article in the Washington Post, "Flat wages and rising debt nationally have converged to leave millions of middle-class households feeling acutely vulnerable to bumps in their financial planning. The most visible of these are rising energy prices and a softening housing market. A less obvious but powerful variable is the interest paid by people carrying credit card debt or mortgages whose monthly payments vary with interest rates."
Mortgage moms are committed to finding financial solutions that address their current challenges without ransoming the family''s future. A common solution is home refinancing, which enables them to consolidate personal debt, access cash from their home''s equity, and trade their adjustable-rate mortgage (ARM) for the stability of a low fixed rate.
With more home loan options widely available, homeowners are using traditional home refinancing for a variety of purposes, including avoiding the interest rate hikes associated with an ARM. While their monthly mortgage payments may increase slightly, they will enjoy affordable fixed payments for the duration of the loan. Even swapping an ARM for another adjustable rate mortgage can provide substantial savings, provided the new loan has more attractive lifetime caps on the interest rate.
Home refinancing can also be used to obtain cash from the home''s equity that can be used for just about any financial need. Many homeowners use the cash to pay off higher interest credit card debt, potentially saving themselves thousands of dollars in interest each year. Of course, this radical approach to debt consolidation only works if the family sticks to its budgeting guns and does not return to its old spending habits.
With so much riding on their decisions, mortgage moms can benefit most if they spend time researching and comparing their loan options, prior to making a decision. Home refinancing is just one potential solution, but it is certainly not the only route to stabilizing "the nest egg" in a fluctuating economy. As politicians gear up for the next round of campaigning, it seems likely that they will listen carefully to the mortgage moms and their concerns, as they play a key role in determining so many financial decisions in middle-class homes.