Answers
Existing mortgage: 80-20. No equity. 1 year since purchase. 2nd loan home equity line of credit has variable APR. Please share ideas to refinance 2nd loan and also consolidate other loan.
It's a bad time to refinance or consolidate with interest rates going up like they are. If you are having trouble making your payments, go to the lenders and tell them - tell them whatever they want to know, answer all their questions truthfully, and ask them to assist you in doing something to make those payments manageable. You have nothing to lose (because if you are having trouble making payments they'll already be aware of that) and everything to gain (banks and mortgage companies don't want to "own" a bunch of foreclosed homes, believe me. It's no easier for them to sell them than any other seller). I wish you the best of luck
Usually when a person refinances an equity line of credit, they combine it with a new first mortgage refinancing. Learn about difference reasons ...
running downhill on my mortgage and don't want to start over
Is there a balance on he line of credit? If so, and it is a 2nd behind your primary mortgage, then yes, you can refinance it by opening up a new home equity line or with a home equity loan. I have done that before. There is no need to pay off the 1st mortgage when refinancing a 2nd with a new 2nd.
Should I get home equity line of credit or refinance with cash out?
I want to refinance my home to take advantage of lower interests rates. I also want to renovate my house and fix some things around.
Should I refinance and get cash out to use for home improvement or should I refinance without cash out and get a separate home equity line of credit?
Note: I already refinanced last year and got cash out.
it all depends on where your current loan to the value is at this point. The most cash you can take out at this point is with an FHA insured note and that is 85% loan on the value. If you owe that much or more as the rules changed over the last year then you have no shot at a HELOC or a refinance. If you owe less than that then yes it is a great time to get cash for improvements
I am a mortgage banker in TN
My home has appreciated significantly, and I'm looking to pay off my current adjustable rate mortgage and get a fixed rate loan at a lower interest rate, as well as extra money to fix it up and pay off my car loan and other bills. Also, do either cover property taxes and insurance, or will I have to pay them out of pocket? I just want to know the basics before going to the bank so I don't feel confused or overwhelmed. Thanks!
If your goal is to pay off your existing loan, your only option is to refinance. A HELOC is essentially nothing more than it sounds - a line of credit backed by your house and therefore with a lower rate than unsecured instruments like credit cards. You would use a HELOC if you were satisfied with your current mortgage rate and wanted to consolidate a bunch of payments into a single one with a more attractive rate.
So, when you refinance your home at a better rate, property taxes and insurance (both types: mortgage insurance if less than 20% equity and homeowners) will both be components of your "PITI" payment (principal, interest, taxes, insurance, [mortgage insurance])
My mom wanted to know! =]
Thanks!
In short, a home equity line of credit is different in that it is an account you can use or not use, but a home loan is a static loan arrangement.
When someone gets a mortgage or refinances their home this is a loan with a specific number of payments. For example, there are 15 and 30 year loans that will need to be paid back over 180 or 360 months, respectively. Once you use this credit it you continue to have payments for the term of the loan.
However, with a home equity line of credit, this is more like having a credit card--backed by the equity in your home. So your mom might use this credit and pay it back. Or she might not use it at all and therefore not have any payments until she uses it again. Home equity lines of credit are usually adjustable rates.
I'm a Texas mortgage broker; My company is http://www.mylendingplace.com
Home Equity Loan Vs. Refinancing
Home equity loan and refinancing are two excellent ways that can help you manage your finances. You can opt for the lower payment schemes of cash-out refinancing, or you can choose the great tax benefits offered by a home equity loan. Say, your home is valued at $300,000 and your existing mortgage balance is $200,000, your home equity remains at $100,000.
Home Equity Loan
Home equity loans are usually provided in two kinds: the home equity line of credit and the home equity installment loan. A home equity line of credit line means that you are borrowing against the value of your home; your home is your collateral to the credit. Home equity plans are usually set at a fixed time; say 10 years but with variable loan rates. Also called the closed end home equity loan, you amortize your loan for periods lasting up to about 15 years.
...News
Bank of America event offers help to customers at risk of foreclosureThe Star-Ledger - NJ.com - Aug 28, 2011
Five years ago, they refinanced and, a year later, they took out a home equity line of credit. But then Peggy, 70, lost her job and health problems forced Don, 75, to only work part-time. Their house is now worth less than the mortgage. and more »
DailyFinance - Aug 24, 2011
What's the Best Way to Borrow for Home Renovations?A New York homeowner named Joy recently asked me for the best way to borrow: I am in a dilemma whether or not to refinance my mortgage, get a home equity line of credit (HELOC) or a home equity loan. The reason for the extra money is for some home and more »Chicago Tribune - Aug 18, 2011
My wife and I have excellent credit, and we have an existing home equity line of credit (HELOC) on our primary residence with about a $20000 balance. We get excellent offers from other lenders advertising their equity lines with zero closing costs andRed, White, and Blue Press - Aug 22, 2011
Yet, many financial counselors often caution homeowners against using opportunities like cash-out refinancing or a home equity line of credit to pay off unsecured debts as this could potentially be problematic despite the fact that there are conditionsLeagle.com - Aug 30, 2011
7 The Bank asserted that a debt originally secured by a home equity line of credit ("HELOC") was nondischargeable, due to continual draws on the HELOC after the home that secured the loan was sold. From the allegations of the Complaint,Fox Business - Aug 26, 2011
Also directly tied to the federal funds rate: your home equity line of credit, or HELOC. That's because HELOC rates are typically linked to the prime rate. When the Fed raises or lowers its target rate, HELOC rates follow suit. and more »World Property Channel - Aug 24, 2011
Q & A with Dottie HermanKeep in mind that the refinance and the home equity loan will have closing costs, but the line of credit may not. Ask your lender or loan officer which type of mortgage would be best for your situation. Q2 - I need to sell my home, as we are moving to