When to Refinance Your Home Equity Line of Credit
Usually when a person refinances an equity line of credit, they combine it with a new first mortgage refinancing. Learn about difference reasons for refinancing a home equity line of credit with help from a financial specialist in this free video on home loans and money management.
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Hi my name is Matt McKillen, I'm with Innovative Financial Group. The question posed today is when is the best time to refinance your home equity line of credit? That's really a broad subject to discuss. Generally when I've refinanced a client's home equity line of credit, it is not to put it back into a new home equity line of credit. Usually when we refinance an equity line of credit is we combine it with a new first mortgage refinance. Now this may be done for a variety of reasons. One maybe is that their home equity line has been used up. They've borrowed every bit of their home equity line maybe to do home improvements or consolidate all their debts, so there's really no advantage to having the home equity line open anymore. Another reason to refinance that mortgage into a new first mortgage is a lot of times you can combine your home equity line debt into your new first mortgage at much more favorable interest rates. Not to mention if you refinance your loan from let's say on your mortgage from 30 years down to 20 years, now you've set yourself up for a repayment on both mortgages combined into one and you're going to be on a set plan of repayment versus possibly making interest only payments on the home equity line of credit. These are just a couple examples of why it's a good reason to refinance your home equity loan of credit. Again, my name is Matt McKillen, I'm with Innovative Financial Group.