THE ANSWER LIBRARY
Use equity with a clear plan
Start with the mortgage you already have. Compare added borrowing with replacing the loan and with no new borrowing. Keep payment relief, total cost and the risk to your home in view.
41 published answers
What if I use a lower payment to pay the mortgage down faster?
Directing a payment difference toward principal can change the outcome, but only if the comparison includes the new loan’s fees, rate, balance and term. Model the extra payments explicitly and compare with making the same total payment on the existing debts. Do not assume a refinance plus reinvestment automatically wins.
Read the answerWhat is the difference between LTV and combined LTV?
Loan to value compares a loan amount with the property value used for the transaction. Combined loan to value considers more than one secured loan under the applicable calculation. These ratios help describe leverage, but they do not determine approval by themselves. Ask which balances and credit line amounts the lender is using.
Read the answerWhat should I do before my HELOC draw period ends?
Find the end date and the repayment terms now. The ability to borrow may stop, and the required payment may increase when principal repayment begins or other contract terms apply. Ask for the expected payment schedule and compare paying down, restructuring or keeping the line’s repayment plan before the deadline approaches.
Read the answerWhy could my HELOC payment change later?
A HELOC payment can change when the rate changes, when you borrow or repay money and when the draw period ends. Some lines require different payments during repayment, and some have a large amount due at maturity. Read the actual agreement and test the later payment before relying on the initial one.
Read the answerWhy is paying off credit cards with home equity risky?
You may replace unsecured debt with debt secured by your home. That can change the consequences of missed payments and extend repayment, even if the monthly amount falls. Compare direct repayment and creditor assistance first, then examine the full cost and a plan to avoid rebuilding the card balances.
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