<\/span>Why This Choice Might Be the Right One<\/span><\/h4>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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If you want to get a new loan for the same amount as what you owe in your current loan to save on interest rate or for a shorter term, then opt for a new loan for a somewhat larger amount so that you can cover new expenses.\u00a0<\/p>

Or get a new loan with a longer term so that your monthly payments are more affordable, but be aware that you\u2019ll eventually pay more interest, this way.\u00a0<\/p>

So if you\u2019re having trouble making the payments this is a better option than defaulting on your existing loan.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/span>Eligibility<\/span><\/h4>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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A minimum LTV requirement is to be met to qualify, but compared to a cash-out refinance the requirements for home equity loans are lower. <\/p>

Though the requirements vary from lender to lender, if you belong to a credit union and have excellent credit and lending conditions that are favorable then you can borrow up to 90% or even 100% of your home’s value.<\/p>\n

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For a home equity loan, you need a credit score of a minimum of 620 otherwise the interest rate will be quite high. <\/p>

Borrowers with scores of 740 or higher get the best rates. On a home equity loan, unless you close the loan early, the lenders often pay most or all closing costs but if you close your loan in 24-36 months then depending on your location and loan size you\u2019ll have to compensate the lender several hundred to a few thousand dollars for the closing costs.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/span>Difference between a Home Equity Loan vs. a Cash-out Refinance<\/span><\/h3>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Both the home equity loans and cash-out refi’s have higher interest rates compared to refinancing the first mortgage.<\/p>\n

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A home equity loan usually has a lower interest rate than a cash-out refinance.<\/p>\n

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All the usual mortgage qualification requirements, like having sufficient income and lower debts to make the monthly payments, a stable employment history, proper documentation, and a good credit score are needed to qualify.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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<\/span>Conclusion<\/span><\/h2>\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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While refinancing a home equity loan a cash-out refinance is an option when you also want to refinance your first mortgage.\u00a0<\/p>

But if you are comfortable and benefitted from your first mortgage, then you should just pay attention to the current task of refinancing a home equity loan.\u00a0<\/p>

If you want to get the best refinance terms then having a good credit score<\/u><\/a> and a low loan-to-value (LTV) ratio is important. Shop around to find the best deal.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

Ways to Refinance Home Equity Loan There are various reasons that people are thinking about refinancing a home equity loan.  Either they want to reduce their monthly payments by getting a lower interest rate or… Continue Reading How to Refinance Home Equity Loan: The Top 2 Possibilities<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":7743,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_newsletter_tier_id":0,"footnotes":""},"categories":[37],"tags":[1542,47,72,1540,1541,1539],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"https:\/\/www.compareclosing.com\/blog\/wp-content\/uploads\/2021\/05\/Top-2-Possibilities-About-How-to-Refinance-Home-Equity-Loan.jpg","_links":{"self":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/7736"}],"collection":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/comments?post=7736"}],"version-history":[{"count":5,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/7736\/revisions"}],"predecessor-version":[{"id":20020,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/posts\/7736\/revisions\/20020"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media\/7743"}],"wp:attachment":[{"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/media?parent=7736"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/categories?post=7736"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.compareclosing.com\/blog\/wp-json\/wp\/v2\/tags?post=7736"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}