When is home equity loan refinancing done?
Answer:Home equity loan refinancing is very popular. If you got a HEL at 6.75% for 15 years and rates dropped to around 6% and lower, your home equity loan should be refinanced.
Even if you go from a lender A to a lender B for the refinance, there shouldn't be a problem having it refinanced. If the HELOAN is in fact a first lien on the property, it should even be refinanced into a conventional first mortgage to get real low rates. If it is a second lien, then rates can't be lowered as much.
Refinancing a Home Equity Line of Credit
If you have a first mortgage already, and a HELOC and rates keep rising, best options are to refinance your home equity line of credit back into the first mortgage; or into a separate fixed rate second mortgage.
If you took a HELOC, used part of it and no longer need it, you could simply refinance it together with the first mortgage to get lower rates and avoid any possible payment increases.
Whatever you financial reasons are, you should better talk to the loan officer or mortgage broker to see what their advice would be and whether your incentives to refinance a home equity loan are reasonable.
Our advice: Be sure to ask your lender about FHA loans. FHA loans have very competitive interest rates because the loans are insured by the US Federal Government. Even if you have had serious credit problems, such as bankruptcy, it is easier to qualify for an FHA loan than a conventional loan. Also, taking an FIXED rate loan while the interest rates are still low is a smart idea. Check your eligibility here:
| Not at all | Definitely |
Mortgage QnA is not a common forum. We have special rules:
- Post no questions here. To ask a question, click the Ask a Question link
- We will not publish answers that include any form of advertising
- Add your answer only if it will contrubute to the quality of this Mortgage QnA and help future readers
Common misspellings: mortage and morgage