Wednesday, June 22, 2005

Points to consider before you refinance your house

With property values going through the roof, more homeowners are tapping equity in the form of second mortgages. The total amount of second-mortgage debt, including home-equity loans and lines of credit, rose $178.2 billion to $883.7 billion in 2004, according to a recent study by the Joint Center of Housing Studies of Harvard University.

If you're tempted to borrow, first learn about the differences between second mortgage loans and home equity lines of credit. Note that fixed rates on second mortgages are often higher than conventional first-mortgage rates and adjustable-rate loans. Check out average rates for your area. Consider the costs of each alternative and decide with the help of this calculator. Finally, read more about how homeowners are going deeper into debt.

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