Tip! If you are considering getting a home equity loan, you can either get a fixed rate loan or a home equity line of credit. Lenders usually base the rates on their home equity loans on their Prime Interest Rate, the interest rate they charge their most qualified clients or borrowers.

If you are a consumer who owns a home, then you might be tired of getting mortgage solicitations to refinance your mortgage. Most likely, you are a savvy homeowner who locked into a 30-year mortgage a few years at 5% with a fixed interest rate loan. You may be wondering why these mortgage lenders and brokers think you would be interested in refinancing your 5% loan with a 6.5% mortgage rate. Mortgage companies are blasting direct mail campaigns that are targeting many homeowners in Southern California. You may not need to refinance your 1st mortgage, but chances are, you will want to access cash in the coming months. A fixed rate second mortgage or variable home equity credit line can get you cash, and a tax deduction without requiring you to refinance you low interest mortgage.

Second mortgage are effective financing vehicles for funding home construction, purchasing a second home or refinancing variable rate credit card debt. Home equity lines of credit are convenient, for people with changing plans. HELOC’s can improve cash flow because only the interest is due on the portion of the line that you actually accessed. This offers a financing arsenal for borrowers needing cash on a whim for investing, and purchasing rental properties. A homeowner armed with a home equity line of credit protects their family with a safety net of cash reserves in case a emergency or tragedy arises.

Read more at Home Equity and Second Mortgage Loan Options for Cash or Debt Refinancing

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