Consolidating home equity loan into mortgage
Borrow funds as you need them up to your line of credit amount, but only pay back the interest and the amount of principal you choose for the first 10 years.
There is a annual fee that will be waived for the first year.
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The two most common ways to access the equity you’ve built up in your home are to take out a home equity loan or a home equity line of credit.
Loans offer a lump sum at a fixed interest rate that’s repaid over a set period of time.
A HELOC is a revolving line of credit that you can draw on, pay back and draw on again for a set period of time, usually a decade.
Your interest rate in a refinance depends on your current mortgage interest rate.
Zimmerman says the borrowers he works with are shying away from this kind of refinancing because they would end up with a higher interest rate than what they are paying now.
» MORE: Check your free credit score Generally, you can borrow up to 80%, and sometimes 85%, of the property’s value, minus its mortgaged debt, says Ron Haynie, senior vice president of mortgage finance policy at Independent Community Bankers of America, a trade group of banks serving local communities.