Advice on Adjustable Rate Home Equity Loan

Which is better: a fixed rate home equity line of credit or an adjustable rate HELOC?

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Bill's Answer: Bills.com Resident Expert

Frequently, adjustable rate mortgages and HELOCs carry pre-payment penalties that could cost you a lot of additional money if and when you want to pay off the loan. While standard mortgages can contain pre-payment penalties, they are far less common in conventional, fixed rate mortgage loans than in HELOCs and ARMs. If indeed your current home equity line has an adjustable rate, then I suggest you try to convert it to a close ended home equity loan/2nd mortgage. Speak to your current lender to see what your options might be. If you do end up cancelling, it is not going to hurt your credit per se, but a new inquiry for a different loan will affect it to a certain degree.

Regardless of which loan type you are inclined towards, it is imperative that you shop around with several different lenders and brokers to find the best deal possible. By speaking with different lenders, she will be able to compare the interest rates and loan terms being offered to determine which type of loan, and with lender, will best suit her needs. If your submit your contact information in the Bills.com Savings Center, we can have several pre-screened lenders contact you to discuss your options.

Bills.com offers a wealth of information about both home equity lines of credit (available at http://www.bills.com/home-equity-line/) as well as conventional mortgage loans (http://www.bills.com/mortgage/). I invite you to explore our website to educate yourself about the loan options available to you.

I hope the information provided helps you Find. Learn Save.

Best,

Bill

www.bills.com/

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