Home Equity Credits.

Home Equity Line of Credit Home Equity Loans: "Home Equity Loans
Home Equity Loans are yet another way to finance larger projects from the equity you have in your home. These are often called second mortgages (as are HELOCs), and you are allowed to borrow a certain amount no larger than the current equity you have in your home, either from principle payments or property value increases. These are standard loans with fixed rates, and they usually have to be paid back in 15 years or less. With these loans, you borrow a specific amount and have a set monthly payment.

Advantages to Financing Home Remodeling Projects with Home Equity
The average cost of a complete kitchen remodel in the United States in 2004 was $30,000. This is a big enough number that most homeowners need some type of financing, if only partially, to help cover the cost. While both Home Equity Lines of Credit and Home Equity Loans are good candidates for any remodeling project, depending on the project, one might be better than the other.

Kitchen & Bathroom Remodels
These are the two most popular home remodels. They add value to a house, and in many cases have a massive return on their investment. The problem is that estimates from contractors are exactly that, and nearly every project ends up costing a different amount—whether higher or lower—than was originally planned. You will change your mind about 100 times on which materials you want to use, the contractor will run into unforeseen problems, the market price of your materials will fluctuate, among many other things that will swing the price.

The great thing about HELOC is that it is a credit card and you are only paying interest on what you borrow. Let's say you have a $25,000 line of credit that you have earmarked for a kitchen remodel. Your contract"

Using Home Equity for Remodels.

Home Equity Line of Credit Home Equity Loans: "You have already paid all of this money in principle, and it stands to reason that you should leverage that in whatever way you can. There are two basic ways to get the most of your home equity when you are considering a remodeling project. The two smartest and most common methods of financing a home remodeling project are using your Home Equity Line of Credit (HELOC) and/or a Home Equity Loan. These two methods are often difficult to distinguish, but this article can shed a little light on which is which, while getting you on your way to a fantastic home remodel.


HELOC
So how does it work? A Home Equity Line of Credit is exactly like a credit card that you set up with your lender. You have a credit limit that is proportional to the amount of equity you have in your home. Once you have your HELOC account set up, simply advance yourself funds by writing a check. You will pay interest only on the amount you borrow, just like with a credit card. You can use your home equity line whenever you need just like the plastic you have now."

Home Refinance vs. Home Equity

Home Refinance Mortgage Rates: "Refinance vs. Home Equity
How about using the existing equity in your home to pay off your mortgage? Let's illustrate an example.
Say your existing home has an estimated market value of $250,000 and the amount remaining on your first mortgage loan is $150,000.

You will find that most banks charge zero closing costs with minimal hassle. You simply apply for a home equity loan with a participating lender and instruct the lender to use the equity in your home to pay off your mortgage.

Note that interest rates at 80 percent LTV or lower for large borrowing amounts come with very attractive rates. And many lenders offer up to 15-, 20- and, in some cases, 30-year repayment plans.

You can even use your excess home equity to:
Remodel your home
Finance a new car, truck or recreational vehicle
Consolidate your loans
Send your child to college

Unlike traditional refinancing programs where you pay a lot to refinance your home, using the equity in your home to pay off your mortgage saves you all of the up-front mortgage refinancing costs"

Is it Beneficial to Refinance?

Home Refinance Mortgage Rates: "Is it Beneficial to Refinance?
Whether or not it's beneficial for you to refinance will depend on prevailing interest rates, costs to refinance, the expected length of stay in your home, among other factors.

Refinancing will also require the same steps as when you purchase a home, except for the presence of a seller.

You hear a lot about refinancing your home mortgage when rates are falling. But did you know that the cost to refinance can be very expensive?

Think back to the day you closed on your existing home. Remember those excessive closing and filing fees you had to come up with? Many of those similar closing costs may be charged again when you refinance, such as:

Mortgage Points
Attorney Fees
Appraisal And Inspection Fees
Title Search And Insurance Fees
Document Preparation

In fact, experts say that your new refinancing rate should be anywhere from 1.5 to 2.0 percent lower than your existing mortgage loan rate in order to recoup your cost to refinance."

Refinancing Your Home

Home Refinance Mortgage Rates: "Refinancing simply means paying off your mortgage loan with another mortgage loan that carries a lower interest rate.

For homeowners with mortgage rates that are 1.5 to 2.0 percent higher than current prevailing rates, refinancing can reduce their current monthly payments.

Some homeowners may refinance a home to switch into a different mortgage product. For example, homeowners with adjustable rate mortgages may refinance to get into a more stable fixed-rate mortgage, especially if interest rates are low.

QUICK TIP:For homeowners with mortgage rates that are 1.5-2.0% higher than current prevailing rates, refinancing can reduce their current monthly payments.


Some homeowners may also refinance to take cash out for home improvement, college education, auto buying, and other. They will refinance at a higher value to repay their existing mortgage loan and take cash out of their home equity for expenditures."