As host of the Money Minute, RP Funding CEO Robert Palmer uses his expertise in the financial and real estate industries to answer viewer questions and offer valuable advice on money saving tips and personal finance goals.
One viewer has a home equity loan amount of $55,000 at 7.79% and wants to refinance. He has good credit and is in good standing with equity. Given his situation, is he able to refinance a home equity loan?
Thinking about a mortgage? We will tell you the main thing so that you can make an informed selling and buying a home decision and choose the optimal conditions.
What is mortgage
A mortgage loan, or, more simply, a mortgage, is a special type of loan in which you register ownership of your property, and the bank takes your property as collateral.
Until you fully repay the loan, you cannot just sell the property or make other transactions with it – this will require obtaining the consent of the bank. But otherwise, you can dispose of the property as you like – for example, register relatives and make repairs.
Who can apply for a mortgage
There are general requirements for borrowers.
Registration on the territory of the Russian Federation
Age – from 18 to 75 years old at the time of payment of the mortgage, and if you apply for a mortgage without proof of income – up to 65 years
Stable income
Work experience at the current place of work from 3 months
Some lending programs have additional requirements for borrowers – for example, only families with a child can apply for a mortgage with state support for families with children.
Robert’s Response
With good credit and a good amount of equity, he should absolutely be able to refinance. He can fall under what is called the cash out refinance rules which would give a lower loan to value.
With a loan as low as $55,000, there will also be limited closing costs — which will probably fall around $1,800 or $2,000. With interest rates as low as they are, he should be able to recoup those fees in the first year of savings. Given these factors, refinancing a home equity loan should be an attractive option.
For more information on a home equity loan refinance, contact RP Funding at (321) 397-4420, and visit our Money Minute page for more financial tips and advice from Robert Palmer.