CONSUMER ALERTS

May 2009

A window into home equity

The current economic crunch has made pretty much everyone take a closer look at their finances, especially when it comes to their homes. If you’re among those Americans wondering about mortgage refinancing or taking a loan against your home’s equity, there’s an easy way to learn what you need to know to make the right decision for your needs.
     With the Home Equity package of publications from the Federal Reserve Board and the Federal Citizen Information Center, you can learn about taking out a home equity line of credit against the value of your home, as well as about refinancing your mortgage.
     When Your Home is On the Line: What You Should Know About Home Equity Lines of Credit explains what a home equity line of credit is and how it works. The publication addresses the positive and negative aspects of a home equity loan. For example, if you stop making payments, you could risk losing your home. The publication also documents which factors, such as home value and your credit history, will be used to determine your line of credit.
     If the current lower interest rates have made you consider refinancing your mortgage, A Consumer’s Guide to Mortgage Refinancing will guide you through the ins and outs of how that process works. Refinancing typically involves paying off an existing mortgage and creating a new one, or combining two loans so you pay only once per pay cycle. This booklet will explain what factors you should consider before you refinance, such as the length of your mortgage and your interest rate. It also provides tips to help you pick a lender or broker. You’ll learn some of the common reasons for why people refinance, as well as what situations aren’t ideal for mortgage refinancing.
     With the Home Equity package, you’ll learn valuable methods to keep your home finances in balance. 

• Visit http://www.federalreserve.gov/pubs/equity/equity_english.htmand http://www.pueblo.gsa.gov/cic_text/housing/guide_finan/refinancing.htm to read the two publications online. Or visit www.pueblo.gsa.gov/media-promo.htm to find links to these and hundreds of other federal publications you can read or print for free.

• Call toll-free 1 (888) 8 PUEBLO. That’s 1 (888) 878-3256, weekdays 8 a.m. to 8 p.m. Eastern Time, and ask for the Home Equity package. Have a credit card handy.

• Or send your name and address and a check or money order for $3.00 to Home Equity, Pueblo, Colorado, 81009.

            Get even more information and take advantage of online government resources at www.USA.gov and www.GobiernoUSA.gov—your official English and Spanish web portals to the Federal government.