Refinancing a home equity line of credit can save you from rising interest rates. They can also help you develop a payment schedule that fits your budget needs. And if you consolidate your home equity loan with your first mortgage, you can save even more on rates.
Options For Paying Off Your Line Of Credit
A home equity line of credit with its open terms and rates, makes it an ideal candidate to refinance. The easiest option for refinancing is to roll over the loan to a second mortgage. You can choose fixed or adjustable rates and terms. Closing costs will also be minimal.The other choice is to combine your home loans into one mortgage. This will qualify you for lower rates than if you just apply for a second mortgage. However, if you already have a low rate mortgage, you could lose out on closing costs and interest charges.If you are thinking about doing a total mortgage refi, it’s best to compare numbers on your financing options. Factor in how long you have left on your original loan, future interest charges, and possible savings.
Be Choosing With Your Lender
Your current lender will automatically strive for your business, but take the time to look at other offers. The best way to make comparisons is to ask for loan quotes.These loan estimates should be based on preliminary information supplied by you. Don’t allow lenders to access credit report; unless you want to see your score go down.With loan quote numbers, look at the fine print. Compare the APR for overall loan costs, but also look at the closing costs and rates separately. If you don’t plan on keeping your home or loan for more than seven years, you don’t want to pay a lot at closing, even for a small reduction in rates. You won’t recoup the cost in such a short time.
Don’t Delay Refinancing
Once you find a favorable loan offer, start the application process to secure the rate quoted. With online applications, your loan can be processed in less than two weeks with paperwork complete through the mail.
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