Refinancing Your Home Equity Loan - How to Refinance a Home Equity Loan
Tip! Reverse Mortgage - Retirees remaining in their homes can still tap their home equity as a source of retirement income. An entire industry has grown up around the 'reverse mortgage' concept which allows seniors over 62 to tap into their home's value without making any repayments during their lifetime.
Refinancing your home equity loan is simple when using online lenders. By comparing loan quotes, you can find the lowest costing refi solution. In addition, you can save time and hassle by completing your application online. In less than two weeks, you can reduce your rates and payments by refinancing your home equity loan.
Refinancing Options For Home Equity Loans
You have a number of options for deciding how to refinance your home equity loan. The simplest method is to just refinance your current home equity loan as a second mortgage.
The other option is to refinance both your first and second mortgages to qualify for lower rates than if you just refinanced your second mortgage. You also save on closing costs by paying lawyer, appraisal, and other fees just once. In addition, the hassle of multiple applications is eliminated.
However, combining mortgages is not always the best financial choice. In some cases, refinancing separately will get you better rates. You may also save money by having different terms on your mortgages. For example, you may want your first mortgage for 30 years, but your second mortgage for five.
Start By Comparing Numbers
To see real savings on your interest and monthly mortgage payments, ask for loan cost estimates from lenders. For a quick search, look at the APR to find the lowest costing refi package.
But to get a real sense of your savings, calculate the interest cost on your current home equity loan and potential refi loan. Remember too that there is flexibility with your refinancing. You can shorten your loan to reduce interest or lengthen terms to reduce monthly payments.
Tip! Another reason to get a home equity loan is for the payment for education. With today's soaring tuition, most homeowners would rather use home equity loans than to pay it with cash.
Finishing The Refinancing Process
By looking online for your refinancing quotes, you have practically completed your loan application. When you receive a quote, most lenders provide an option to finish the application. This may mean submitting a request online or completing a form.
Once your refinancing has been approved and loan contract signed, your original loan will be paid off by your lender. You can start enjoying your lower monthly payments in less than two weeks.
View our recommended lenders to refinance your home equity loan online.
Carrie Reeder owns ABC Loan Guide, an online resource with information about home equity loans online and low rate mortgage companies online.
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