Can i refinance my house equity financing?

New Credible Money Mentor helps a reader understand how to refinance a house collateral financing and you may extremely important considerations having refinancing. ( Reputable )

Hello Joyce, and you can many thanks for your own matter. The new brief response is, yes – it’s possible to re-finance a property collateral financing.

A home equity loan is technically a type of mortgage that allows you to borrow against the portion of your home’s value that exceeds your mortgage balance. Like any other type of mortgage or home equity product, you’ll need to check all the lender’s boxes in order to qualify for a home equity refinance.

If you’re considering refinancing into a conventional mortgage, you can use Credible to evaluate your own prequalified rates from multiple lenders.

Exactly how domestic equity finance work

House guarantee fund are referred to as 2nd mortgage loans because the they’re usually taken out as well as your mortgage. It is a bit unusual to stay your position, Joyce, that have a home collateral mortgage without top home loan. This case could happen in the event your fees title in your domestic collateral mortgage try more than enough time you’d kept to invest on your own number one home loan.

Household collateral financing really works mainly the same as an initial home loan. Once you personal to the a home collateral financing, the lending company will give you a lump sum payment. Then you definitely pay the borrowed funds, with notice, over a decided-on while – usually out-of four to 31.

When you re-finance property guarantee financing, you can sign up for a new domestic collateral mortgage to repay the bill on your dated you to definitely.