Home Equity Loan Refinance
Redoing 2nd Loans for a Better Rate
If rates fall on subordinate liens, why wouldn't you want to refinance your home equity loan to secure a lower interest rate with more favorable terms? Mainstream home-equity lending soared 33% last year according to SMR Research, with new borrowing at nearly quadruples the level of just five years ago. These figures don't include home-equity lending to those with credit issues--the sub-prime market. Sub-prime mortgage lending rose 60% last year, said SMR vice president George Yacik, to $516 billion.
The increasing concern over rising interest rates has moved many people to strongly consider refinancing their adjustable rate first mortgages and home equity loans (second mortgages) to lock in fixed rates before the next anticipated rate hike. Fixed-rate refinancing makes sense, especially since one in four mortgages, including adjustable rate second mortgages, will adjust by the year 2007. For many, the decision to refinance variable rate second mortgages will be to lock in fixed rates in times like these where interest rates are rising. But, others may refinance adjustable rate equity loans not only to lock in a fixed rate, but also for debt consolidation. The 125% home equity loans are particularly popular for bill consolidation and other cash-out purposes.
Debt
(creditors) |
Balances
(Totals you owe) |
Monthly Payments |
Amex |
$10,500 |
$270 |
Master-card |
$6,800 |
$230 |
Visa |
$5,700 |
$188 |
Home Depot |
$3,500 |
$110 |
Sears |
$3,250 |
$88 |
Variable Credit Line |
$50,000 |
$479 |
Total |
$79,750 |
$1,365 |
|
|
|
New Loan
9.5% Fixed Equity Rate |
$82,000 |
$689 a month |
Our loan Saves you $676 a month and $8,112 a year! |
|