Consider a New Home Mortgage Not a New Home

Three good refinancing options are:

• Rate and term refinance of your current home mortgage. If your current home loan interest rate is at a higher rate than what is currently offered today, you may want to refinance your mortgage, lower your interest rate, and take some additional cash for home improvements.
• If you have a great interest rate on your 1st mortgage, a home equity line of credit is a great way to access your home's equity. Home equity lines of credit (HELOC) are a second mortgage product that acts like a revolving credit card. You can borrow, and pay back, the line amount repeatedly. HELOC's are an interest only product and the interest rate is based on the prime rate (currently at 8.25%). While HELOC's generally have higher interest rates than first mortgage products, most lenders offer low cost and no cost HELOC's as well as the opportunity to fix the interest rate on a portion, or all, of the credit line amount borrowed.
• If you would like a set second mortgage payment amount each month, consider a home equity loan. Home equity loans are fixed interest rate products and are 30 year amortized loans that are due in 15 years. Like HELOC's, the interest rate is higher than first mortgage interest rates; however, home equity loans are also offered at low and no cost.