Home Equity Loan
Which would be better for us, taking out a home equity loan or refinancing?
My husband and I want to take about $15,000 to pay off debt and renovate our home, which we just purchased last July. Our current interest rate is 7.25% and we owe about 65k on our home that appraised at 100k. The problem is that our credit is not great and not well established. Which would be the best option for us, home equity loan or refinance?
Public Comments
- Home equity without a doubt. Way too many points (money) to pay to refinance. Also an expensive appraisal. I have had 2 banks offer to give a home equity loan for nothing but the interest they would get! No points and they pay for the appraisal. All the banks are doing it. Try the bank where you have your accounts first. Chase bank is hungry for that type of loan interest. Good luck.
- student loan.
- An equity loan has to be repaid in one year or it either will be refinanced automatically by the bank or it will go into default if not paid in a year. Better of refinancing if your credit is not horrible. Chase has no money right now so it would be a horrible choice. Right now National City and Bank of America are the banks that have money to offer credit. I work in the Finance industry.
- Home Equity loan = seperate loan, additional payments I would refinance.
- If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determine<!--the monthly payment you will need to make. You also need to know if the interest rate is of a fixed or adjustable nature. Fixed rate implies that the monthly payments will remain constant, while an adjustable rate implies that rates will fluctuate depending on market conditions. http://best-loans.awardspace.com/homeloans.htm In adjustable rate, when will rates change? If your interest rate on the home equity loan is of the adjustable variety, you need to know three things: when the rate is going to change (that is under what conditions), how frequently will the rate change and what’s the average-->percentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.
