Type of Refinance Mortgages II
Friday, October 31st, 2008Refinancing an Equity Loan
An equity loan is typically an adjustable rate mortgage based on a certain percentage of value on the home. Refinancing an equity loan into a first mortgage gives the borrower one lower, typically fixed interest rate.
Most equity loans are adjustable rate mortgages based on the Wall Street Journal’s prime rate, and can move up or down throughout the life of the equity line. An equity line is like a checking account or credit card, only the amount you can borrow is limited to the value of the home and your available equity. When you refinance an equity line, you can refinance it by itself or roll it in with a first mortgage to pay it off.
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