Refinance a Home Equity Loan
Refinance a home equity loan is a very popular type of loan product that can be used by homeowners to tap into and liquidate a portion of their home equity. While a home equity loan can be a great loan option to have, there may be a situation in which you will want to refinance it. There are several advantages that can come when you decide to refinance your home equity loan.
One reason to refinance a home equity loan is that you will be able to take more equity out of your home. The amount of money that you can get out of your home on a HELOC or other equity loan is based on the appraised value at the time you took out the loan. If you end up taking out a new equity loan, or refinance an existing one, you could end up seeing your home value rise. If this occurs, you will qualify for a larger loan and will have access to more debt than before. Once you are able to take out more equity out of your home, you will be able to use it for a variety of different purposes. Some great options include paying off other high-interest debt or using it to fund an education.
Lower Interest Rate
Another great reason to refinance a home equity loan is that you will be able to qualify for a lower interest rates. If market interest rates have dropped since you have last refinanced your home equity loan, you could qualify to take out a new loan at a lower rate that is consistent with market terms. Ultimately, this could end up saving you thousands of dollars over the course of a year through reduced interest charges.
Finally, when you refinance a home equity loan, you will be given a fresh start. If you have started to fall behind on payments on your home equity loan, you could be facing some severe penalties including late charges or even foreclosure. In these situations, refinancing your home equity loan could be very advantageous as you will be given a fresh start on your new loan. When you have a new loan, you will start off in full compliance and will not have to face any penalties. Furthermore, it will be a good first step in building a new relationship with a lender that can benefit you in the future.