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Home Equity Line
Home Equity Lines are a great way to use the equity you've built in your home to pay off other debt such as cars or credit cards. You may also use them to pull out cash for home improvement purposes or any multitude of things. Home Equity Lines are usually easier to get and cost less than a refinance mortgage, and are some times faster to close.
Why they are good
Home Equity lines are good to use when you need cash because the interest is typically tax deductible. So if you are in a 33% tax bracket, that can reduce the effective rate even further than the note rate when you consider the tax savings. They are typically fast and can go toward the top of your available equity. The convience of a home equity line is that you may typically use them like a checking account and pay them down or withdraw funds during the draw period.
Why you may not want one
The downside to equity lines are that the interest rates are usually higher than a refinance or 1st position mortgage. They are typically adjustable (unless you get a fixed rate 2nd mortgage) and vary based on prime rate. The margin above or below prime rate is the rate you pay on the equity line.
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If you are considering a refinance mortgage in California, New York, Florida, Texas or any state within the US, you may find a mortgage quote from our network of lenders. A mortgage refinance quote is available for any one of a number of programs, whether that be a 30 year fixed mortgage 15 year fixed or a shorter term adjustable such as a 5/1, 3/1, or 10/1 Adjustable rate mortgage.
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