Refinance Home Improvement Loan: Get Rates

Refinance Home Improvement Loan: Get Rates

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Refinance home improvement loan Rates are the first thing that comes to mind when you need to refinance a loan. The term and closing costs usually follow suit thereafter. You may have already asked yourself which is better? A home equity line of credit or a home equity loan? And what is the difference? When Rita Refi had refinance home improvement loan questions she visited Bobby The Banker online. She was quickly shown all the best rates on the market resulting in her obtaining the most favorable rate. She got a Bankrate Report within seconds by just choosing her loan type, state, and reviewing the products. Given a comprehensive look at lender’s she quickly realized interest rates and fees are lower with online lenders. But what she liked most was the fact that they did NOT even collect any of her personal information. Unlike some competitors.

Refinance Home Improvement Loan

Refinance Home Improvement Loan

  • The Players: Rita Refi, Ricky Rehabber, Bobby The Banker

  • The Game: Home Equity Loans, Home Equity Line Of Credit, Cash-Out Refinance

Refinance Home Improvement Loan Options

What options come to mind when you think refinance home improvement loan? Let’s start by answering which is better? A home equity line of credit? Or a home equity loan? In order to answer that you must first ask yourself this question: Do you need to borrow the money in small to medium amounts over time whenever you need it?  Or do you need a lump sum up front that you plan to pay back soon?

Don’t Pull Out The Magic 8 Ball

The answer’s in your scope of work. Even though a home equity line of credit and a home equity loan are secured by your property. A home equity line of credit (HELOC) is similar to a credit card. The variable interest rate charged is based on prevailing prime rates (which can spike and rise) so it shifts. Your payments will vary. The HELOC is good when you don’t know exactly how much cash you’ll need and you are not in a hurry to finish a project. For example, Rita Refi needs home improvement at home. She’s not sure if she wants to add a wood deck addition costing about $9,500, replace vinyl siding for $11,500, or remodel the basement and build a backyard pool over the next couple years. Since she’s undecided and doesn’t need all the cash immediately, a home equity line of credit will do fine.

On the other hand, her boyfriend, Ricky Rehabber owns a house across the street. He knows exactly how much it will cost to upgrade the kitchen and bathrooms, replace fixtures, front door, garage door, paint and carpet etc. He set a deadline and strictly budgets labor and materials. A home equity loan would be perfect for him. Ricky will get a lump sum, with a fixed interest rate (not adjustable) and he’ll know exactly how much he’ll owe every month til he pays it off. But unlike his girlfriend Rita’s HELOC, he will NOT be able to borrow any more money from the loan during it’s lifespan.

Cash Me Out Scotty – Then Beam Me Up

Another alternative is a cash out refinance where you refinance for more than the amount owed. It’s pricey. And you’ll still be using your home as collateral as with the prior two loans. You’ll be able to extract equity to pay down your debts or do a home improvement with this. But when you extend your mortgage term and increase the payment amount as with this option, you should be very mindful of foreclosure. Another risk is you can also wind up underwater on your mortgage. So how does it work? Let’s say Rita Refi’s house is worth $100K and She still owe’s $50K. She needs $20K to replace her roof. She can refinance for $70K and pull out the $20K in equity to fix the roof. But be careful, because cash outs are always higher. You’ll also have to pay closing cost in addition to the risk.

  • The Skinny: Your home is up for collateral in a HELOC, Home Equity Loan, and a Cash Out Refinance. Be mindful of foreclosure and the possibility of your property value decreasing as well as going underwater on your mortgage in a cash out.  Regardless of your choice, make sure that it’s for a Home Improvement That Pay’s Off adding value to an asset. Not to purchase liabilities and blow the money on things that don’t produce cash flow.

Now that you have a better understanding of refinancing a loan in regards to home improvement, you also have the option of considering a personal loan as another alternative. Your next move is to get a free BankRate Report that will simplify all of the options presented and allow you to make a more informed decision based on current market rates in addition to what you’ve learned.

You’ve got the skinny on your home improvement loan refi but there’s just one more thing. If you have ever entertained the thought of increasing your income substantially by using the same investment strategies of Bobby The Banker to produce Cash Flow, do yourself a favor and check out this FREE INFO.

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