Put Your Mortgage to Work for You
Home Improvement Loans, HELOCs, and Refinancing
A home mortgage can be both a big responsibility and an untapped opportunity. Current mortgage holders have options when it comes to realizing the possibilities – from home equity loans (home improvement loans) and home equity lines of credit (HELOCs) to loan refinancing as a means of securing better loan terms.
Home Equity Loans
Also referred to as a home improvement loan, home equity loans are available to mortgage loan holders who have equity – meaning that the loan balance is smaller than what the home is worth. Another term for this kind of loan is a second mortgage, and a home equity loan generally offers a fixed rate and payment over a specified term. Many people use this kind of loan for large home improvement projects such as a kitchen or bath remodel or addition.
Home Equity Line of Credit
A home equity line of credit (or HELOC) is a revolving line of credit available for you to use at your discretion. In this way, it operates more like a credit card – you only withdraw what you choose, and the interest rates on HELOCs are generally variable.
Both home equity loans and home equity lines of credit can be powerful tools for responsible borrowers. However, as with any debt it’s important to use it responsibly.
Mortgage Refinancing
A mortgage refinance replaces you existing home mortgage with a new loan – preferably one with better terms for you. Common reasons for refinancing include securing a lower interest rate or reducing monthly payments. Sometimes, mortgage holders refinance to pay the loan off faster, eliminate mortgage insurance, or switch from an adjustable rate mortgage (ARM) to a fixed rate loan. There are expenses associated with mortgage refinancing, so the benefits of the process should outweigh the costs.
When it comes to being a mortgage holder and home owner, there are many options for optimizing your loan. Talk to a mortgage expert to learn more about putting your mortgage to work for you.
Sources:
https://www.investopedia.com/terms/h/homeequityloan.asp
https://www.nerdwallet.com/article/mortgages/how-to-refinance-your-mortgage
https://myhome.freddiemac.com/refinancing/planning-to-refinance