Refi vs Heloc

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Post Mon, Jul 19 2021, 11:12 am
I am not too financially savvy but I have been told time and time again that we should refi our house now because rates have dropped and we can save money. We bought our house in 2014. I am just confused about refinancing vs Heloc. I understand Heloc is borrowing money against our house. I have no desire to renovate our house right now. Ok that is a lie... of course I have the desire but we don't have the money and I don't believe in borrowing money you don't have to beautify things. As of now fixing our house would be a want vs a need. So let's say I refi now but in 5 years we decide we do want to renovate, can we apply again? Is it stupid to separate these two processes? Will I be paying a lot more? I don't want to lose the opportunity of low interest rates but don't think it is a good idea to cash out or borrow a Heloc at this time.
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Post Mon, Jul 19 2021, 1:55 pm
We recently refi due to the low rates. We shaved off 5 years and are paying a few dollars more than we were before.
I do know that they asked us if we wanted to add any money to the loan for repairs etc. We did not.
I don't see why you couldn't apply for the other loan in a few years.
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Post Mon, Jul 19 2021, 1:59 pm
I think alot depends on how much money is left on your mortgage. If it's not a very big amount (say, 100K or less) it may be worth taking a HELOC. Otherwise, it may be worthwhile to refinance.

I refinanced my mortgage in my previous home, and went from a 30 year mortgage to 15 years, with a slight increase in my monthly payments.
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Post Mon, Jul 19 2021, 2:19 pm
I'm in this line... as a mortgage broker I get this question all of the time. You are looking for a refinance to take advantage of locking in current low rates.

A HELOC does not have a fixed rate. The rate varies based on Prime. It's like having a credit card with a line of credit that has a lower rate than your typical credit card because it is a lien against your home. (HELOC stands for Home Equity Line of Credit)

You can always apply for a HELOC later on down the road.
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