Which Is Better For Home Improvement - Refinancing Or A Second Mortgage?
33464
Finance > Mortgage
May 28, 2007
Joe268
Which Is Better For Home Improvement - Refinancing Or A Second Mortgage?
Finding the money you need to make those home improvements can lead to having to make some serious decisions. If you really want to make those home improvements, then you have basically two choices - either refinance a first mortgage, or get a second mortgage in order to get access to some of that equity. While either choice could give you access to some cash for your project, only one choice will actually be better for you - depending on your circumstances. Here is what you need to know to make that decision. You can get access to your cash by refinancing your first mortgage. If you find that you can get some better terms than what you already have, then this may be the way to go. Look for a lower interest rate that is about 1% or more lower than what you already have for a good deal. Mortgage Insurance? One thing that could help you decide would be if you are paying Private Mortgage Insurance, and now have more than 20% of the house's value in equity. By refinancing, you could get access to your equity with a cash out mortgage, and drop your PMI at the same time. In order to drop the PMI, though, be sure that you do not refinance for more than 80% of the attained value of your home. This means that you need to leave 20% of your equity intact. Get the security of fixed rates Another possible reason to refinance might be to get away from an adjustable rate mortgage - if you have one. Many people are now seeing the danger of these mortgages. They are great when the financial times are good, but horrible enough to cost you your home when economic times go a little sour. By refinancing your first mortgage, and using your equity for your home improvement project, you can gain the financial stability you need. Refinancing with either a first or a second mortgage could be not worth your time, though, if you are not planning on staying there very long. The costs of refinancing are significant, and will take the average person at least three to five years to start to see a positive return on their investment. Options of Second Mortgage A second mortgage will give you two options - either a home equity loan or a home equity line of credit (HELOC). Both of these will give you higher interest rates than on a first mortgage, and a second payment. Besides that, there are the same costs involved for the financing. As a second mortgage, either one gives you the cash you need to beautify your home. Home improvements or repairs are tax deductible which means your actual rates are brought down some by the deduction. A HELOC will give you a greater flexibility since you draw out the money as needed (for a limited time), and only pay interest on the amount you use. So, if you are not sure you need the full amount of your equity, this method will save you some money, but be careful and be sure you understand how it will be amortized - and when. Get the best mortgage deal Refinancing or getting a second mortgage is a very common method of getting cash to fix up the home place. It also builds up the value in your home even more. Anytime you are thinking about either option, be sure to shop around getting several quotes, and then do a careful comparison of the fees (especially), as well as the interest rates. The bottom line is that it depends on your own goals and financial situation as to which option may be better for you, but comparisons of quotes will let you know which option will best help you meet that goal.
Joe Kenny writes for Rebuild.org, offering mortgage refinance, or for UK residents home improvement loans.
Visit today: Refinance with Rebuild.org send email to Joe268
Visit today: Refinance with Rebuild.org send email to Joe268
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links owned by this user
It may be very tempting to think that in order to get the best credit card you need to look for the cheapest card available. Tempting as it may be, it would also be wrong.
Category:
When you start getting behind in those bills, and the collectors start calling, you begin to feel the pressure from being in debt.
Category:
Getting the new car that you want can be a lot of fun - it can really make your day. But what can be even a little better, is when you know that you got a great deal on your car, too.
Category:
It is true that you can use the equity in your home as a way to get a secured loan for home improvement. In fact, it is being used now as a common way for people to get money to make their home improvements and fill some of their dreams.
Category:
When it comes time for you to think about getting a mortgage, you should know that there are some things that you can do to help yourself get a better deal. In most cases, they can be performed over a few months, but will prove their worth in savings over
Category:
Car insurance is something that we all need - if we drive a car. While having car insurance may not be an option, just how much we pay for it is. There are a number of things that can make those numbers add up, while other factors will tend to bring those
Category:
Taking care of your debts can be done rather quickly by getting a cash out mortgage. A cash out mortgage is actually a first mortgage and it will require you to refinance your existing one.
Category:
If you have lived in your home for a number of years, then you have had time to have built up some equity in your home.
Category:
Home equity loans are a great way to get the cash you may need - for just about any reason. It could also be enough money to fulfill some of your dreams, too, if you have lived there for some time.
Category:
The choices that you have facing you when it comes to picking the right mortgage does not make it easy to get a good one. To make it worse, there are possibly so many different options with each one that you would almost think it was made to deliberately
Category:
Having someone in your home that is going to college certainly does put an extra pinch on the finances. This could make it difficult for the student as well as the parents. If you have lived in your home for a while, though, by refinancing your mortgage y
Category:
Everyone has heard about payday loans. You have seen the advertisements and possibly received them in the mail, too. If you have need of some quick money, then a payday loan may be a solution to your need.
Category:
Many lenders are in serious competition with each other to be able to give you a loan. This means that it may be easier than it has been in the past to get a personal loan. Competitive pricing and interest rates may make it nearly an ideal time.
Category:
If you are one of those people that often stand in lines at the airport in order to do business as usual, then you may already know the value of an air miles credit card. Not all air miles credit cards are equal, however, but it will take some research in
Category:
You probably already know what payday loans are - who has not seen the ads on the Internet, on TV, or in the mail? They seem to be just about everywhere. Yes, the interest rates on some of them can be rather high, too. But did you know that there is a way
Category:
When you need cash in a hurry, you need to get a payday loan. You have seen the various ads all over - especially if you surf the Internet very much. They are just about everywhere.
Category:
Fixing up your home is one of the most worthwhile uses of the equity in your home. Not only that, but it also adds comfort and beauty to your home as well - making it even more enjoyable to live there.
Category:
Finding a house with an assumable mortgage these days could prove to be a real find - but it is not very common. Typically only the FHA and the VA uses assumable mortgages, which basically means that another person can simply take over the house and payme
Category:
In these days of hustle and bustle, and everybody just generally being in a hurry, it is also true that you can get a mortgage that way, too. But the speed and the rush that may surround your getting a mortgage for that home that you wanted, may also have
Category:
Being able to buy a new car when you need one is certainly a necessity in the world we live in. Many people, perhaps even you, need to commute to work every day, and there may not be any public transportation nearby.
Category:
Other links at Finance > Mortgage
Ever imagined paying off your mortgage in one go when you strike a first prize lottery or the day you inherited a lump sum of cash from a deceased old woman down the street whom you always say good morning to? Reality says this is not going to happen nor
Category:
Homeowners are a privileged lot when it comes to getting loans. Their home acts as a security that lenders like.
Category:
Recent trends in the mortgage industry have now come up with a way for you to be able to get a home with zero down. This means that it has now become much easier to get the house of your dreams and not have to save for years in advance.
Category:
When buying a home, one of the first things you should do is check your credit report and score. Your credit score is probably the most important piece of information a lender considers when deciding on your interest rate, so you want to be sure that ever
Category:
There are many ways to save money. You could try to reduce your interest rates on unsecured loans or lines of credit by rolling them into a second mortgage or combining them with an existing mortgage. Secured loans such as mortgages normally save you mone
Category:
Site Sponsor
Directory Statistics
Articles: 68285
Categories: 501
Yahoo Entertainment
