How Do I Decide Between Mortgage Refinancing And A Home Equity Loan? The decision between mortgage refinancing and a home equity loan depends on your financial goals and the equity you have built in your home.
- Mortgage refinancing involves taking out a new mortgage to pay off your existing mortgage. It is typically done to lower your interest rate, change your loan term, or access equity in your home.
- A home equity loan, on the other hand, is a separate loan that is taken out using the equity in your home as collateral.
- It provides a lump sum of cash that you can use for a variety of purposes, such as home improvement, debt consolidation, or other expenses.
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When deciding between mortgage refinancing and a home equity loan, consider the following:
- Financial Goals: Do You Want To Lower Your Monthly Mortgage Payment, Access Equity In Your Home, Or Both?
- Equity in your home: How much equity have you built up in your home? The more equity you have, the more options you will have for financing.
- Credit score and financial history: Your credit score and financial history will impact your ability to refinance your mortgage or get a home equity loan.
- Loan terms: What are the interest rates, fees, and loan terms for each option?
- Monthly Payments: What Will Your Monthly Payments Be For Each Option, And How Does That Fit Into Your Budget?