My sister is asking me for money to pay up her home equity line. When I asked about her mortgage payment, she said she paid it off with her home equity line. Is that possible to borrow money on your home to pay off your home?
If her home mortgage rate was higher than her line of credit it makes sense. I do not have a home mortgage but I do have a line of credit on my home.
Normally you can just make interest payments on a equity line if you want. My heloc is locked for 5 years with minimum payment being the monthly interest.
Normally people do borrow on their home to pay off their home when they refinance.
March 8th, 2010 at 12:50 am
Technically, you can do that. Pay off your mortgage with your (Home Equity Line of Credit) HELOC. It doesn’t make much sense because the bank who financed the HELOC can still foreclose on the house.
Plus you still owe money on your house, so it doesn’t make sense to move money from a HELOC vs. a mortgage.
References :
http://www.mywealth.com
March 8th, 2010 at 1:28 am
Sure it’s possible but why would she do that? Now she still owes money on the house but her interest rate is completely adjustable and probably higher than where it was with her first mortgage. The terms of an equity line or 2nd mortgage are never as good as a 1st mortgage.
References :
March 8th, 2010 at 2:17 am
If her home mortgage rate was higher than her line of credit it makes sense. I do not have a home mortgage but I do have a line of credit on my home.
Normally you can just make interest payments on a equity line if you want. My heloc is locked for 5 years with minimum payment being the monthly interest.
Normally people do borrow on their home to pay off their home when they refinance.
References :
http://www.compare-prepaid-cell-phones.com/Codes-for-Tracfone.html