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Refinancing with a Home Equity Loan
Author David Schneider | May 23,2007
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Kal was not happy with his second mortgage. The interest rate was too high and so were the monthly payments. Kal's friend told him that he should refinance his second mortgage to get better terms. Kal decided that refinancing his second mortgage was a good idea so he talked to a mortgage broker. Kal told the broker what he was looking and the mortgage broker showed him several mortgage programs that he could use for his refinance. However, the most attractive product was a home equity loan. After reviewing all of the facts about this product, he discovered that it offered the best interest rates, the best terms and the most flexibility. Due to all of these things, he decided that refinancing with a home equity loan was the best option for him.
Refinancing with a Home Equity Loan
The first home equity loan product that you can use to refinance your home with is a 100 percent fixed rate home equity loan. This type of loan can cover either just your second mortgage or it can cover both your first and second mortgage. The interest rate that a lender quotes you will depend on your credit rating, your mortgage payment history and the policies of the lender.
The second home equity loan product that you can use to refinance your home with is a 110 or 125 percent home equity loan. Lenders designed these loans for people who have little or no equity in their homes, but who need money to pay off credit card debt or other debts. These home equity loans usually have several restrictions associated with them including how you can spend the money, how much you can borrow and the duration that you can finance the loan.
The third option for refinancing your home is for homeowners whose equity has increased because their home has appreciated. This is not a “home equity” mortgage, per se, but it does use the new equity created by your home's appreciation to offer you more borrowing power. To take advantage of your home's appreciation and to get some extra money for bills and other planned expenses, you can refinance your mortgage at your home's new value using a first mortgage product.
Gain Access to Lenders
Gaining access to the right lenders at the right time is the key to successfully refinancing with a home equity loan. Fortunately, QuoteMatch.com can help you do this. Go to QuoteMatch.com now to see how. |
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