Equity Mortgage

That would jolt Wall Street, businesses and people.Falling rates mean dwindling returns on savings accounts, certificates of deposits, money market mutual funds and other savings products. That is especially hard on older people, retirees and others on fixed incomes. They could face a double whammy if lower rates sparked inflation.Low rates, over time, could lead some people to live a lifestyle that they cannot afford. "You could see a restart to some of the behavior that was so prevalent just a couple of years ago, where borrowers were relying on home equity lines of credit and other inexpensive forms of credit to fund their discretionary spending," said Greg McBride, senior financial analyst at Bankrate.com.Short-term adjustable-rate mortgages could become much cheaper than longer term fixed-rate mortgages if the interest rate-cutting campaign continues.

Reverse mortgage workshop informs public about the pros and cons

Local residents gathered at the Kernville Chamber of Commerce Jan. 16 to learn more about reverse mortgages. The Prince Financial Corporation representative, Barbara Prince, Bankers First representative Rylan Rozell and Patty Nash of McKenzie and Nielsen provided those in attendance with large packets of information on the ins and outs of reverse mortgages including the negative aspects of entering into a reverse mortgage. The purpose of the presentation was to educate as well as provide financial opportunities for seniors.

According to the Reverse Mortgage Page website over 50,000 Americans applied for reverse mortgages in 2006. A reverse mortgage is a way to borrow against the equity in your home rather than a forward mortgage where you are attempting to purchase a home and build home equity by making mortgage payments.

Stimulus deal promising; housing risks still plentiful

Analysts are currently trying to decide if interest rate cuts and a stimulus packages will help or hurt.

Mark Zandi, of Moody's Economy.com, sees Fed cuts and Washington's proposed tax rebates as a step in the right direction. Consumers with mortgages about to reset to new rates might now be able to hold onto affordable rates rather than facing payments they cannot tolerate. That should keep people from losing homes and pouring more houses for sale into an already glutted market.

Meanwhile, consumers may have lower interest rates on everything from credit cards and car loans to home-equity lines of credit and college student loans. But lenders are monitoring credit histories closely, so those who have overindulged may not find relief.

And the housing mess that's been weighing on the economy and stock market is far from over.