What is the difference between refinancing a mortgage and getting home equity strip of credit?
My mom wanted to know! =]
Thanks!
Answers:
Refinancing a mortgage means your getting a lower interest rate (it may lower your monthly payments). Equity lines for homes are for home owners who want to do home recovery projects but need money for it. (Some people bring equity lines of credit and use the money for other things besides their home) Its just another way for bank to get people to receive loans.
With refinancing you will take out a new mortgage for 15/30 years at a cheaper rate than the artistic, and use part/all of that to pay off the remaining harmonize on the original mortgage. So you will only enjoy 1 mortgage, and 1 monthly payment.
With a Home Equity line of credit, you still own your original mortgage but you take out an auxiliary line of credit based on the remaining equity surrounded by the house. If you draw on that line of credit, you will then back up with 2 monthly payments - for the original mortgage and one for the Heloc. Rates for Helocs are roughly higher than for mortgages.
In short, a home equity line of credit is different surrounded by that it is an account you can use or not use, but a home loan is a static loan arrangement.
When someone gets a mortgage or refinances their home this is a loan near a specific number of payments. For example, there are 15 and 30 year loans that will need to be salaried back over 180 or 360 months, respectively. Once you use this credit it you continue to own payments for the term of the loan.
However, with a home equity smudge of credit, this is more like having a credit card--backed by the equity surrounded by your home. So your mom might use this credit and pay it back. Or she might not use it at adjectives and therefore not have any payments until she uses it again. Home equity lines of credit are usually adjustable rates.
I'm a Texas mortgage broker; My company is http://www.mylendingplace.com Source(s): I'm a lic. mortgage broker contained by Texas
refinance means to replace your existing loan with a unmarked one. line of credit is a second loan using the equity in your home as collateral to borrow more money Source(s): retired cpa
Related Questions:
Public Records Reading- Mortgages, Do home equity loans show or basically reverse and second mortgages?
I read public records when doing RE research so I'm wondering. I guess that only second and reverse mortgages show. And why would someone choose a second mortgage vs home equity loan? All recorded...
Thanks!
Answers:
Refinancing a mortgage means your getting a lower interest rate (it may lower your monthly payments). Equity lines for homes are for home owners who want to do home recovery projects but need money for it. (Some people bring equity lines of credit and use the money for other things besides their home) Its just another way for bank to get people to receive loans.
With refinancing you will take out a new mortgage for 15/30 years at a cheaper rate than the artistic, and use part/all of that to pay off the remaining harmonize on the original mortgage. So you will only enjoy 1 mortgage, and 1 monthly payment.
With a Home Equity line of credit, you still own your original mortgage but you take out an auxiliary line of credit based on the remaining equity surrounded by the house. If you draw on that line of credit, you will then back up with 2 monthly payments - for the original mortgage and one for the Heloc. Rates for Helocs are roughly higher than for mortgages.
In short, a home equity line of credit is different surrounded by that it is an account you can use or not use, but a home loan is a static loan arrangement.
When someone gets a mortgage or refinances their home this is a loan near a specific number of payments. For example, there are 15 and 30 year loans that will need to be salaried back over 180 or 360 months, respectively. Once you use this credit it you continue to own payments for the term of the loan.
However, with a home equity smudge of credit, this is more like having a credit card--backed by the equity surrounded by your home. So your mom might use this credit and pay it back. Or she might not use it at adjectives and therefore not have any payments until she uses it again. Home equity lines of credit are usually adjustable rates.
I'm a Texas mortgage broker; My company is http://www.mylendingplace.com Source(s): I'm a lic. mortgage broker contained by Texas
refinance means to replace your existing loan with a unmarked one. line of credit is a second loan using the equity in your home as collateral to borrow more money Source(s): retired cpa
Related Questions:
Public Records Reading- Mortgages, Do home equity loans show or basically reverse and second mortgages?
I read public records when doing RE research so I'm wondering. I guess that only second and reverse mortgages show. And why would someone choose a second mortgage vs home equity loan? All recorded...