Second Mortgage/Home Equity vs. Refinance by:Benjamin Ehinger
Why should you take out a second mortgage or a home equity line of credit instead of refinancing
?Well,You Shouldn't!!
Why Not?
1.Second Mortgages usually have an interest rant that is twice or even three times as high as your first mortgage rate. You can refinance instead and keep a very low rate. In the long run a second mortgage will just cost you money in interest charges.
2.Home equity lines of credit are designed for mortgage account executives (salespeople) to sell you on using it like a credit card attached to your home. They will try to convince you to use it over and over again.
3.A refinance loan is better for the equity in your home. Very few companies will refinance your home at 100% of it's value without forcing you to take out a second mortgage. You don't want to use 100% of your equity because that means you no longer have that equity to fall back on in emergency situations.
4.Second Mortgages and Home Equity lines of credit are designed to provide account executives (salespeople) with another tool to sway you into putting another commission in their pocket.
5.Your equity is a precious thing and should not be used for unnecessary add ons or impulse buys. If you don't need it and there is even a slight chance you can't afford it, then don't get a second mortgage to buy it.
The only reason that I would ever recommend a second mortgage or a home equity line of credit is in an emergency situation. Only when there is no other option and you must take out a loan would I recommend either one of these options.
About the author
Benjamin Ehinger has an extensive mortgage background and has studied the industry for many years. To learn more about Refinancing and Second Mortgages visit: http://bandcdriver.tripod.com/second-mortgage.htm. Franchise Opportunity - 5 Considerations by:Dennis Schooley Does Your Stock Investing Guru Have a Mail Order Ph.D.? by:Dr. Scott Brown, Ph.D. Finding The Top Trading Education Can Be A Challenge by:David Lewis How To Get An Auto Loan With Bad Credit? by:Dean Shainin Building Your Fan Base by:Alicia Forest Financing a Small Business with Little or No Capital by:Norio De Sousa Smart And Easy Steps To Debt Free Life by:Ryan Smith My Clients Won't Pay Me? What Now? by:Marsha Maung Network Marketing: How Sharp Is Your Axe? by:Donovan Baldwin How to Propose Telecommuting by:Stephanie Foster CLV - Customer Lifetime Value - What does it Really Mean? by:Mary Eule MLM Prospecting Success- The Secrets to starting a Conversation with Someone You Don't Know by:Doug Firebaugh Christian Business Opportunities Bring Relief to Your Daily Routine by:James E McHugh