If you are like many home owners who have variable rate HELOCS then you are watching your interest rate slowly climb along with your payment as the prime rate continues to rise. If you have a very small balance on your HELOC you do not have much to worry about, but if you have a larger balance you may want to explore what options you have to get into a fixed rate 2nd mortgage or refinance your first mortgage while rates are still low.
Many people choose to refinance their HELOC, or home equity line of credit into a first mortgage with a fixed rate. Your mortgage professional can also arrange to open a new heloc behind the new first mortgage. This allows you to pay your existing debt at a fixed rate while maintaining the convenience of having an available HELOC.
If you have a HELOC, or a home equity line of credit, with an adjustable rate then you may want to consider refinancing your home equity line of credit, or HELOC into something with a fixed rate. You can either refinance your HELOC into a fixed rate second mortgage, or you can refinance your first mortgage and your HELOC together to have one low fixed rate mortgage versus having a first mortgage and an adjustable rate home equity line of credit.
It can be advantageous to refinance your home equity line of credit (HELOC) into a fixed interest rate. Having a fixed interest rate will provide stability and prevent and increase in rates and payments.
The term refinance is commonly used when referring to the paying off of your existing mortgage(s), or home loan(s), with the proceeds, or funds, from a new home loan. There are many different reasons why people refinance. Most people refinance to try and put themselves into a better financial situation.
One of the most common solutions to refinancing a home equity line of credit is to consolidate the adjustable rate HELOC as well as the existing first mortgage into a new fixed rate home loan, saving on interest and getting everything into one low monthly payment.
The most widely used benchmark for HELOCs is the prime rate. If you have a open ended second mortgage, you can track the prime rate in the "Wall Street Journal," which is the official source.