Need Extra Money? - Refinance or Equity Line of Credit, Which is Right for You?

Apr 2

19:10

2005

Ashlee Hovsepian

You may be looking for some extra money to fix up the house, go on a vacation or buy a new car, and you want to take some equity from your home to do it. To do this you could either refinance your home and take some of your equity or apply for an equity line of credit instead. The question is which one is right for you? There are some things to consider about both options when determining how you should obtain the money.

Refinance Your Home

-Are you currently paying a high interest rate and would like to reduce it?
-Does your lending company charge closing costs or points to refinance?
-Consider that you will be borrowing this money and be paying interest on the full borrowed amount for the duration of your mortgage
-Is the interest tax deductible? Speak with your tax advisor.

Equity Line of Credit

-You are only charged interest for the money you take out.
-You may repay the minimum amount or additional monies without penalty.
-What are the interest rates? Are they lower then the current mortgage rates?
-Are there any fees associated with opening an equity line of credit with our financial institution?
-Is the interest tax deductible? Speak with your tax advisor.

The increase in the real estate market has provided people the opportunity to borrow money against their residences to generate cash for the things they need. Financial institutions are making it easier for people with equity in their homes to borrow money. If you are looking for extra money and own a home, you may want to consider one of the two options, either refinance your existing mortgage or take an equity line of credit against your home.

Article "tagged" as: