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About John Whitehead
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President of mortgage brokerage busines in Middle Tennessee since Jan 1994. I have expertise in all types of mortgage loans, i.e. purchase money, refinancing, bill consolidation, home equity loans, no down payment loans, 1st mortgages and 2nd mortgages and Home Equity Lines of Credit, (HELOC). I know nothing about FHA loans.

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Real Estate Home Mortgages - Refinancing

Expert: John Whitehead - 4/25/2004

Question
Dear Sir I am looking to refinance a small mortgage, $21,000 princaple @ 8% for 8 more years. I have been offered a choice between a 5.59% rate mortgage loan or a home equity line of credit. I already have the line of credit,but she(the lender) offered to expand it from it's current line of $23,500 to $50,000 and drop the current rate from 4.75% to %4.00.My goal is to lower the mothly payments payments.Can you give me some pros and cons on these two alternatives,and particulary some of the pitfalls? ......Thank you for your time.

Answer
Your question deserves more time and space than I can give you in this forum. Many factors come into play in making your decision, i.e. your age, income, cash reserves, etc.. I can say that the home equity line of credit (HELOC) is an adjustable interest rate and that interest rates are at the lowest they have been in almost 50 years so the only way they can adjust is UP!

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About Real Estate Home Mortgages
This topic answers questions related to purchasing a home, owning a home, home ownership, mortgage education, mortgage applications, and mortgage needs whether buying a first home or refinancing a current loan. Issues related to home ownership, home equity, mortgage education, refinacing options, home improvment finacing, first time home loans, home equity loans, vactation home loans, and mortgages for investment homes are dealt with here also. Though not the primary focus of this topic, Home Equity Lines of Credits (HELOCS), reverse mortgages, and calculating home equity may also be asked. If you do not see your home mortgae, home finacing, or home equity question answered in this area then please ask a question here