3 Ways and 1 Big Reason to Refinance a HELOC
If you or anyone you know had a Home Equity Line Of Credit or HELOC in the last 10 years then change is imminent. Most borrowers are unaware of how much their payments will go up. In some cases, payments have gone up as much as 4.5 times from what they were currently paying.
HELOC’s have two stages. First is the draw period, which usually is about 10 years. The payments during this period are interest only.
After the draw period ends, the HELOC goes into the amortization period, and you will have to pay principal and interest. With the Fed raising interest rates, these monthly payments are going up. Don’t get caught off guard. Between 6 months to 12 months before the end of the draw period, reach out to me for solutions.
There are 3 ways to refinance a HELOC. 1. Refinance the HELOC, and start over with a new HELOC, with it’s own interest-only draw. 2. Pay off the HELOC with a home equity loan, witch has a fixed amount and a fixed rate. Payments remain the same through the life of the loan. 3. Refinance the HELOC and first mortgage into a new primary mortgage. Consider refinancing into a 15- or 20-year mortgage to reduce total interest payments.
Don’t get caught off guard with high payments. Be proactive and call me today!