Mortgage Refinance and Home-Equity Loans is the first national curriculum on mortgage refinance and home-equity loans targeted to housing counselors. It can be used to help educate or counsel homeowners through an organized postpurchase homeownership education and counseling curriculum about their options for refinancing an existing mortgage or borrowing money secured by the equity in their home.
Mortgage refinancings boomed in 2002 and 2003. During this period, lower-income homeowners were significantly less likely than higher-income homeowners to seek refinances of their mortgages, even though their mortgages rates were above current levels — sometimes by several percentage points. Many of these homeowners lacked the knowledge of when and how to refinance, and also lacked the savings to pay for related fees. As long as homeowners in underserved communities are locked into unnecessarily high-rate loans, they are losing wealth and assets relative to other populations and communities.
During and since the refinance boom, home-equity loans have also experienced explosive growth. With consumer spending outpacing income growth, and property values rising in many markets, homeowners have increasingly turned to home-equity lending as a substitute for consumer credit to finance new consumption or reduce outstanding consumer debt.
NeighborWorks America developed these materials to fill the void in nonprofit consumer education programs on mortgage refinance and home-equity loans. We recognize the important role refinance and equity loans can and do play for homeowners. This curriculum can be a useful tool for trainers and counselors to help lower-income households manage their home equity effectively and maximize their potential for building personal wealth.
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