• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

Should you do a cash-out refinance or get a home equity line of credit?

May 19, 2019 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
why the house that needs work should not be overlooked

As mortgage rates continue to remain flat, it might not be a bad thing to consider really weighing out both options of getting a home equity line of credit or doing a Cash out refinance for that home improvement project or debt consolidation you have been thinking about. If you’re looking to pull money out of your house, consider your options first…

Home equity lines of credit are low cost to acquire sometimes no cost. If you ever close out the home equity line of credit you may incur an early closure fee. A home equity line of credit is effectively an enormous credit card tied to your house. You only pay interest on any present balance which means that it can sit there with no balance as a safety cushion, if you ever need to borrow money it is at your disposal.

Any payment that you make on the home equity line of credit for the first 10 years is interest only. Meaning your balance will never go down unless you make an overage payment and the additional money that you pay beyond your interest only payment goes toward principal. These loans are also variable rate tied to the prime rate.

Mortgage tip: these loans are no longer tax deductible.

Cash-out refinancing your first mortgage instead as an alternative to a home equity line of credit might not be such a bad thing. The closing costs might be about 1% of your loan amount maybe depending on your area and specific location. The interest rate is higher, but also is tax deductible. A 30-year mortgage also means having a lower payment for your debt. If you were to compare a fixed rate 30-year term to a home equity line of credit plus a first mortgage you might come to find that the payments for both are about the same or maybe as little as fifty bucks a month more (in some cases) for the comfort of having a long-term fixed-rate loan.

Most consumers would probably stand to benefit by being able to deduct more interest as a byproduct of cash-out refinancing their home to fix up their house or doing a debt consolidation for example then they would taking a home equity line of credit that is not tax-deductible and has a variable payment associated with it.

Therefore, it is critical to work with an experienced lender who can walk you through the ins-and-outs of deciding whether a fixed rate mortgage makes sense or whether home equity line of credit is a more suitable choice for you and your payment and cash flow objectives.

Looking to refinance? Get a no cost quote now.

Related Mortgage Advice from Scott Sheldon

  • why the house that needs work should not be overlooked
    Home Equity Line Of Credit Loans May Soon Be Adjusting Up

    If you have a home-equity line of credit, or thinking about getting one, here is…

  • why your mortgage goals why not happen
    Is a 50 year mortgage a good move?

    Are you looking to afford a mortgage? A 50 year mortgage may be an option,…

  • home equity lines of credit
    New tax bill 2018- why people should refinance their equity lines and second mortgages

    The new 2017 tax plan is spelling unwelcome news for mortgage borrowers who hold home…

  • Does My Loan Type Hurt My Credit Score?

    Future favorable financing deals, low rates and preferred credit offerings all will be available depending…

Filed Under: Interest Rates, Loan Programs, Mortgage Shopping, Mortgage Tips & Advice Tagged With: mortgage rate quote, qualifying for a mortgage, refinancing, refinancing my mortgage, Santa Rosa mortgage, Santa Rosa mortgages, shopping mortgage rates, SONOMA COUNTY LOANS, Sonoma County Mortgage Rates, sonoma county refinance, sonoma county refinancing

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window