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.
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