Refinancing
with Home Equity Loans
If
you have lived in your home for a reasonable amount of time, you may be
considering refinancing.
Refinancing
can be done in a few different ways. One of the most popular recently
has been the home equity loan. A home
equity loan is a loan used to pay off your existing mortgage at a
lower
rate.
When
refinancing
with a home equity loan, you have the option of liquidating some of
the equity you have established in your home through monthly mortgage
payments and appreciation.
Lets
suppose you owe $125,000.00 on the mortgage to your home, but your home
is worth $200,000.00. This means you have $75,000.00 worth of equity that
you can liquidate.
Realistically,
you could get a home equity loan for $150,000.00, pay off your existing
mortgage, and have $25,000.00 left for home improvement, a new car, college
tuition, etc.
Home
equity loans also come in the form of a line
of credit, better known as a home
equity line of credit.
The
difference between a home equity loan and line is that the line comes
with a variable
rate, which means it will adjust with the prime
rate, so be careful when deciding. The home equity credit line can
be re-tapped once it has been partially paid off, or paid off in full,
which makes for much convenience.
Before
deciding on how you want to go about doing your refinancing, be sure to
educate yourself as much as possible about the mortgage industry.
Shop
around for the best rate and program that fits your needs and budget.
The mortgage industry is a competitive one, so let them fight for your
business. Good luck.
Cash-Out
Refinance
ARM
Loans
Fixed
Rate vs. Variable Rate Mortgages
Interest
Only Loans
Mortgage
Closing Costs
Mortgage
Insurance (PMI)
Reverse
Mortgage
Prepayment
Penalty
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