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Which is better? Refinance, home equity loan, or home equity line of credit? To buy a car and remodel home.? |
Which is better? Refinance, home equity loan, or home equity line of credit? To buy a car and remodel home.? It all depends on the interest rate you get. Under no circumstances can you get an ARM loan but if you can get an interest rate the same or lower than your current mortgage rate that's fixed then go ahead & re-fi but STAY AWAY from ARM loans. Also stay away from the line of credit becuase it's too tempting to keep using that money after you pay it down.& most times it's also an adjustable rate. The home equity loan would be your best bet if you don't re-fi because you should be able to get a fixed rate. If you have to get an adjustable rate on the equity loan make sure you have the option to lock the rate at some time in the very near future. Also check into pre-payment penalties. WaMu does give you the option to lock your rate on your equity loan, it's called a FRLO (fixed rate loan option). Good luck with the new car & home improvements. Be warned though, WaMu customer service sucks, I should know. I was told to never use your home in any manner to buy a car. The loan will last longer than the car. As far as remodel, I would get whichever of the above that has the cheapest rates and then refinance after the remodel is done. You might even be able to get a construction loan if the remodel is large enough and then refinance. Smaller remodel and misc bills, then I would refinance. The lines of credit scare me as they are too similar to a credit card and so easy to run up. Right now because of everything going on in business, it's better to refinance. With the interest rates going on for line of credit's for your home...and the balloon rates on your loan it's for crazy people. It is definetly better to refinance...let me know if you need a loan...I'm in california Loan business Refi first, then a HELOC as your second choice. Regards Satar Naghshineh California Licensed Real Estate Broker and Investor If your first mortgage is between 10 to 15 years old, do not refi because you already paid more than 50% of the interest. Most mortgage companies hit you between 60 to 70% in interest on the first half of the life on the loan. Get a 2nd mortgage fixed for no more than 5 years. |
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