Justin has 5 years of experience as financial adviser; his key areas are consolidation, insurance, debt relief, mortgages etc. For more free articles and advice visit http://www.Bills.com.
If you are considering taking out a secured loan against your home, two of your options are home loan mortgage refinancing with cash-out or home equity loans. Depending on your particular situation one may be better for you financially that the other.
Cash-Out Refinancing
A cash-out refinance is refinancing your mortgage for more than the current balance on your first mortgage. Home loan mortgage refinancing usually has a lower interest rate than home equity loans, but if you borrow more than 80% of your home’s value then you may have to pay private mortgage insurance. If you have had your mortgage long enough that you are paying more principal than interest each month or if you currently have a good interest rate, it does not make much sense to refinance and a home equity loan will probably be a better option.
Home Equity Loan
A home equity loan is a loan on the difference between the market value of your home and the balance that you still owe on your mortgage. As a separate loan in addition to your mortgage, you do not usually pay the closing cost associated with a mortgage and the interest is usually tax deductable. Home equity loans are a good choice if your penalties for pre-payment on your original mortgage make refinancing impossible.
Which is Best?
Investments in the value of your home, starting a small business, or life-saving medical treatment are all good reasons to consider a cash-out refinance. However, you may end up paying more for your total interest than if you refinance your current mortgage at a lower interest rate and take out a home equity loan for a shorter term. Your final decision will depend on what you can afford for your monthly payments and if you are comfortable paying a larger total interest in exchange for lower monthly payments and lower interest rates.
If you are interested in debt consolidation, you may be able to get a lower interest rate with a cash-out refinance, but you lengthen the amount of time over which to pay off your loan. You might want to look into a home equity loan with a short term or simply re-budget and tackle your highest interest debt first and try to pay off your credit cards. This last method will probably same you more money in interest paid over time.
Remember that whether you opt for a cash-out refinance or a home equity loan, in either case failure to repay your loan can cost you your home. For more articles on Mortgage Refinance, visit: http://www.bills.com/mortgage-refinancing/
- Related Videos
- Related Articles
- Ask / Related Q&A
- Tips On Mortgage, Mortgage Refinancing, Home Loan, Bad Credit
- A Guide On Refinancing Home Loans
- What is a Mortgage Refinancing Home Equity Loan?
- Is Now The Perfect Time For Refinancing Home Loan
- What is Mortgage Refinancing Home Equity Loan?
- How To Get The Best Refinancing Home Loan Secrets
- Refinancing Home Loans
- Qualifying Criteria For Home Mortgage Refinancing and Loan Modification
FHA home loan program is a FHA mortgage loan designed to assist every Florida homebuyer
By: FHA home loan Lender | 05/12/2009FHA home loan program is a FHA mortgage loan designed to assist every Florida homebuyer. FHA Home loans down to a 530 FICO.
Easily Get a Mortgage Refinance or Modification with Bank of America
By: MPetrone | 05/12/2009Bank of America is now able to offer mortgage refinancing and modification to homeowners in all sorts of bad situations. This is all because of over $75 billion in funding from President Obamas stimulus program. With this program and Bank of America, a homeowner will be able to easily lower their monthly payments, change the terms and conditions of their loan, or get cash back from the equity that has built up on your home.
Don’t Take a Mortgage Interest Rate Rise Without a Fight
By: David Nalin | 05/12/2009More than likely if you have a Standard Variable Rate Mortgage you face at least a $50 monthly repayment increase. Whenever the Reserve Bank opts for an increase in the official Cash Rate, you will need to, more than likely, look for additional similar increases in the ensuing months.
All about home mortgages the tips and tricks
By: Paul Ingersole | 04/12/2009Conventional loans are basic loans. They generally require very good credit. As a reward, they also have very low interest rates. These include Fannie Mae and Freddy Mac loans. Conventional loans have a maximum loan amount that changes each year based on compiled financial statistics. Jumbo loans exceed the maximum loan amount of a conventional loan.
FHA Mortgage Rates in FLorida are the lowerst
By: FHA home loan Lender | 04/12/2009The record-low FHA Mortgage rates won’t last long, say 62% of industry experts polled by www.FHAmortgageFHALoan.com this week. Only 7% foresee an additional decrease over the next 30 to 45 days, while the remaining 31% expect no change
Stimulus Plan Mortgage Refinancing and Modification Help
By: MPetrone | 04/12/2009Mortgage refinancing has become a very popular option for homeowners who are facing financial hardships or other home loan problems. New Government stimulus programs allow homeowners in all types of bad situations to easily find, and get approved for refinancing or mortgage modification. Here are some of the reasons why refinancing right now is so popular.
How You Can Refinance Your Mortgage And Save Big Today
By: Lara Sawyer | 04/12/2009Are you smothered in mortgage debt? Find out how to refinance your mortgage and save tons of money right now.
5 Typical Points Of The Reverse Mortgage Cost
By: Juhani Tontti | 04/12/2009The reverse mortgage cost is very close to that of the usual mortgage loan. You are expected to pay a so called appraisal fee, theorigination fee, the upfront mortgage insurance premium and cthe certain other typical closing costs. Mosts fees are capped, i.e. they are paid from the reverse mortgage loan.
Understanding Judicial Foreclosure
By: justin narin | 05/08/2009 | MortgageForeclosure is one of the most severe and difficult financial processes for any consumer. Unfortunately, foreclosures are also peaking, meaning thousands of American families are now facing this dire consequence. What does it mean, and what can you do to avoid foreclosure?
Subprime Loans and the Real Estate Market
By: justin narin | 29/07/2009 | Real EstateThe Subprime Loan Fallout is Affecting All Areas of the Real Estate Market
Get the Best Mortgage Refinancing Rate
By: justin narin | 27/07/2009 | Personal FinanceIn order for you to get the best mortgage-refinancing rate available to you, you will have to do a little research and a little math. Because it costs money out of pocket to refinance, it is only beneficial to you if you plan on staying in your home long enough to make up the difference between your refinancing costs and your interest savings.
FHA Mortgage Insurance
By: justin narin | 22/07/2009 | Real EstateThe FHA loan insurance program was created to help first-time buyers get into homes. However, first-time buyers usually don't have 20% down payments and may have a spottier credit history. In order to provide protect taxpayers from paying for defaulted FHA mortgages, the loans include mortgage insurance premiums (MIP).
Find the Best Bad Credit Second Mortgage
By: justin narin | 20/07/2009 | MortgageAlthough it seems strange to take on more debt to improve a bad credit history, a home equity loan may be the solution to your financial problems. Learn when you should consider a loan, and when to look for other options.
Things to Consider with a Refi Mortgage
By: justin narin | 20/07/2009 | MortgageA refi mortgage can be used for several purposes – to lower your interest rate, to lock in a fixed interest rate, to pay off credit card debts, or to combine two mortgages into one. It is a substantial financial decision to make, so make sure you are well informed with information before taking any action on a refi mortgage.
Refinancing Second Mortgage
By: justin narin | 17/07/2009 | MortgageA second mortgage, also called a home equity loan, often has a much higher interest rate than a first mortgage. Discover the money saving benefits of refinancing a second mortgage.
Home Equity Loan or Home Loan Mortgage Refinancing?
By: justin narin | 14/07/2009 | MortgageIf you are considering taking out a secured loan against your home, two of your options are home loan mortgage refinancing with cash-out or home equity loans. Depending on your particular situation one may be better for you financially that the other.