Pooks asked:
wouldn’t the home equity loan momthly payment still have to be made?
TOM
wouldn’t the home equity loan momthly payment still have to be made?
TOM
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MATT
I’m not sure why you would want to do this but if you were to get a line of credit that you use to pay off the home equity loan, then you wouldn’t have anything to pay on the HE loan.
Were you talking about refinancing a home equity loan with a HELOC? If so then it makes more sense except for the fact that most HELOCs are variable interest rates and could easily go up.
JEFF
No. What happens is that you open a new Home Equity Line of Credit and the balance you have on the home equity loan can be paid off with the Line of Credit (thats when re-financing). But I think it’s a bad idea because you already have a loan were the interest rate is fixed and you know exactly when it’s going to be paid off, as to oppose a line of credit were your interest is variable and could be paying a lot of interest. This is what you should do, keep the home equity loan, if possible re-finance (or compare rates) for a much lower interest rate. Then, if you do want a line of credit (for emergency money) then apply for a new Home Equity Line of Credit. Good Luck!!
JEREMIAH
You can’t have a home equity loan and a line of credit on the same property because they are both considered second mortgages. If you re-finance with a line of credit then the funds from the line of credit will pay off the home equity loan and then anything left over is for you to draw against as you feel necessary. You will only have one payment.