Refinancing vs Line of Credit

Must Read

Debt Consolidation Loan – A Complete Review

Are you considering a debt consolidation loan? Well that is a good idea, since it is the best practical...

Analysis of strategic management – the right way

Base treatment decisions is to analyze the impact of the balance between short and long term - the results....

Banning Texting While Driving Will Save Lives

The National Safety Council estimates that a person has a one in eighty-four chance of dying in a car...

Windows Phone Using Location Services (GPS)

GPS 101 Let’s spend a few minutes to just learn the basics of GPS, in order to better use it...

Does Debt Consolidation Actually Work?

Many individuals have become consumed by debt. With salaries stagnant, rising inflation, high unemployment and an ever-increasing global recession,...

Step 6. Link Strategy

Most of the search engines are giving heavy weighting to link popularity and link relevancy—that is, the number of...
Admin
test

Refinancing vs line of credit are two popular options you have when deciding the best way to take equity out of your home. Sometimes it makes sense to establish a line of credit. But in other situations it’s better to get a cash back refinance mortgage loan.You can find out which loan is best for your situation by doing some simple math. The amount of money you need to borrow and the length of time you need to pay it back really determines if refinancing vs line of credit loan makes the most sense.Home equity lines of credit are based on adjustable type mortgage rates and move up or down when the Fed raises or lowers the prime rate. If you don’t need to borrow much money and plan to pay off the loan in a short amount of time, an equity line of credit may work best for you because you pay the least amount of interest.An advantage of a home equity credit line is banks offer their lowest interest rates on adjustable mortgage rate type loans. Also, equity lines of credit usually come without the typical closing costs you pay with a cash back refinance mortgage loan.Average closing costs on a refinance loan usually amount to several thousands of dollars. So when you are trying to decide between refinancing vs line of credit that should factor into your decision.Another advantage of a home equity credit line is they are more flexible than a cash back refinance mortgage loan. With a home equity credit line you only pay interest on the amount you borrow. The remainder of the credit line is available at any time without paying any interest.Home equity credit lines work well for smaller loan amounts, but if you need a large amount of money, say $75,000 to $100,000, you may want to consider a cash back refinance mortgage loan.A cash back refinance mortgage loan is a first mortgage and most are amortized over a 30 year payment schedule. That keeps your payments more affordable on a larger loan amount. Most home equity lines amortize over 10 years or 15 years because they are a second mortgage loan.Another consideration when trying to decide between refinancing vs line of credit is the interest rate you currently have on your first mortgage. If you have a low interest rate on your first mortgage you may want to take advantage of a home equity credit line so you can keep your low rate on the first mortgage.If you have a high interest rate on your first mortgage, a cash back refinance mortgage loan with a lower interest rate might make more sense. Just remember to do the math because the average closing costs on a refinance loan will amount to several thousands of dollars.Until you repay the loan closing costs you won’t be saving any money even if your monthly payment is lower. Figure the number of months it takes in payment savings to cover the typical closing costs of a cash back refinance mortgage loan to see if this makes sense for you.These simple tips should help when deciding if you should establish a line of credit or get a cash back refinance mortgage loan. Do the math to find out if refinancing vs line of credit makes the most sense for your situation.Copyright © 2005 Credit Repair Facts.com All Rights Reserved.

Latest News

Digital Marketing for Beginners

Digital marketing for starter, Let to basic learning about connecting with your audience in the right place at the...

What are 7 things poor people do that the rich don’t?

1. poor people watch TV in which people read books how many hours you spend in front of the TV and when was the...

Top 18 best small business ideas for beginners starting

A small business can be frightening and requires plenty of careful planning there are many small business ideas which can be beneficial as well...

Summer that makes you happy

We saw were already here I've been thinking about some of the things. I used to do with my husband even though he had...

4 Point to helpful tips specifically for caregivers

What you need to take a vacation. I know it sounds impossible creative and try to make it work for you almost everyone needs...

More Articles Like This