Advantages and Disadvantages of Refinancing a Home Equity Loan in Farmington Hills Homeowners often ask if their existing mortgage can be refinanced with a home equity loan. While this isn’t a common practice, it’s possible to do so. If you’ve built up a lot of equity in your home, this makes financial sense. For example, if the interest rates were relatively high when you bought your home and then they dropped significantly, refinancing with a home equity loan could be very beneficial, especially if you have a lot of equity built up. So what are the advantages and disadvantages of doing this? The advantages include: • being able to capitalize on lower mortgage rates • having the ability to adjust your monthly mortgage payments and terms of the loan • obtaining working capital for home remodeling and renovating • transitioning from an ARM (adjustable rate mortgage) to a fixed rate mortgage On the other hand, there are 3 disadvantages: • homeowners are required to assume additional payments and additional risk • it’s backed by your home and requires additional time and money • you may be obligated to a longer repayment term While refinancing with a home equity loan does provide certain benefits, it’s best to do this once you’ve built up sufficient equity in your home. https://www.google.com/maps?cid=17636774335061292863