HELOC Refinancing with Fixed Rate Home Refinance Loans
Borrowers across the country are refinancing their HELOC with 30-year fixed rate home refinance loans. Get rid of your adjustable rate HELOC and convert the home equity line to a fixed rate home refinance loan that offers a fixed monthly payment and hedge against inflation.
Refinancing with fixed rate home mortgage loans is recommended and borrowers can choose from conventional, FHA, VA and non conforming loan types. Our mortgage lenders offer home refinance loan conversions to help refinance your revolving lines. Check out the low rate programs for fixed rate refinancing. Nationwide is a mortgage broker with strong relationships with leading direct lenders across the country. We have cultivated these relationships.
Refinancing Adjustable Rate HELOC with Fixed Home Equity Loans
As the Federal Reserve Bank continues to push the interest rate higher, homeowners are watching their adjustable rate mortgage payments inch up as well. One of the ways to stop your rising mortgage payment is to refinance to a 30-year fixed rate mortgage.
"The plan is for the feds to keep raising rates until inflation comes down.' says mortgage broker Mike Johnson. As expected interest rates continued to rise throughout 2006 and 2007, but the Federal Reserve has seen enough of a slide in the housing sector to finally drop key interest rates by .50. In 2008 the Fed continue to lower key rates that have spurred a small refinance boom.
We've already noticed a trend of home prices dropping because the rising interest rates prevent new purchasers from jumping as quickly. A recent newspaper report shows some homeowners slashing prices simply to get a bite.
What's odd is homeowners are accepting higher interest rates from a 30 year fixed rate mortgage for the security of locking in the interest rate. If their equity is taking a hit, some homeowners might try to refinance their entire debt to a secure fixed interest rate.
The interest rate averages for this week show home equity loans hovering around the same interest rate, while home equity lines of credit or HELOC's are moving upward, four points in the last week. Variable rate home loans are more difficult to qualify for because most lenders are calculating the adjusted payment when figuring their debt to income ratios.
"Consumer advocates agree that the best debt to refinance is the highest-cost and longest-term debt because refinancing those offers the most return for the effort."
Bank Rate shows "First, some refinance after deciding to keep a house longer than they originally intended. Second, some refinance because it's easier to make firm plans for the future if their mortgage rates can't fluctuate. Finally, some have simply changed their minds about mortgage rates, and think they're headed up for a long time."
A shorter term fixed rate mortgage could also help you rebuild the equity already pulled from your home. The conversion from ARM to FRM could help you avoid a balloon payment, and if your property values have actually risen, you might be able to pull even more equity out of your home in the process.