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Should I refinance my Home Equity Line of Credit?

Q: I have a variable Home Equity Line of Credit which is at 5.8%.  This seems high with all of the low interest mortgages around.  I have been remodeling my home with the HELOC and still have the kitchen to re-do.  Would I be better off trying to find a lower rate at another bank or credit union?

A: You should consider shopping for a better line of credit. Start with the lender who has your current one; they might offer you better terms. Please know that mortgage lenders who hold second liens (like your home equity lender) face strong market risks at the moment, and so aren't in a big hurry to offer rock-bottom rates for new offers. Talk to your existing lender, but be prepared to scour your local market for other offers.

More help from HSH.com

  • When refinancing at a higher rate makes sense

    Trade your old mortgage for a new, higher-rate version? There are times when it actually makes sense.
  • Should I pay off a mortgage early?

    By making extra principal payments or refinancing your mortgage, you could pay a lot less interest and free yourself from your mortgage ahead of schedule. Here are the pros and cons of retiring your mortgage early.
  • How does a refinance in 2017 affect your taxes?

    After a mortgage refinance, there are some specific "dos" and "don'ts" you need to know prior to filing your income taxes, as well as a few pointers that can help you lower your tax bite.

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