Ask Bill your personal finance question

Home Sale or Refinance

We want a HELOC or home improvement loan. What are our options?

We want to take out a home improvement loan or a line of credit for remodels. We built our house in 2007 and put a lot in it when we purchased it. We have had it on the market for 6 months and want to know what is the best thing to do.

Read full question
Bill's Answer
(4 Votes) | Find Learn Save

  • The market for HELOCs has all but disappeared.
  • Consider a mortgage refinance to free-up cash flow.
  • Home values have plummeted in some areas of the US in the last 3 years.

The facts in your message are bit confusing. Do you seek to tap into the equity of the house you built in 2007, or do you wish to sell this property?

If you seek a home equity line of credit (HELOC) or a second mortgage you may face an uphill struggle. First, property values across the US have fallen since 2007. Depending on your location, location, and location, your property may be worth 10% to 50% of what you paid for it in 2007 regardless of the improvements you made to it since your purchase.

Second, the market for HELOCs has all but disappeared, and lenders that offer HELOCs are doing so at rates that are not attractive. Third, the same can be said for so-called home-improvement loans, which are simply second mortgages.

You did not mention the balance of your mortgage or the fair market value of comparable properties in your area. If you have a loan-to-value of 80%, then a mortgage refinance at today's low rates might free-up cash flow to allow you to tackle the remodeling you have in mind. See the mortgage refinance savings center to get no-cost quotes from up to five partners who offer refinances in your area.

I hope this information helps you Find. Learn & Save.



Get Mortgage Rates!
(4 Votes)

People also like to Read

Daniel Cohen

Learn home equity basics, how to use home equity, and the different types of home equity loans. ... Read more >>

Betsalel Cohen

Obama Passes HARP, but borrowers are looking for HARP 3.0 Mortgage Refinance programs. When a HARP 3 update is announced, you... Read more >>

Daniel Cohen

HARP Mortgage Program Refinance | Home Affordable Refinance Program (HARP) was just updated to avail low interest rates to mo... Read more >>

Daniel Cohen

US Bank | Learn about US Bank and no-closing-cost refinance mortgage loans. US Bank offers no closing cost mortgage loans, bu... Read more >>

Betsalel Cohen

Low mortgage rates can help you save money. Also, refinance now if you want to lower your payments, take out cash, get rid of... Read more >>

Betsalel Cohen

Did you take an FHA loan a number of years ago? You might be able to lower your payment and/or save big money by refinancing ... Read more >>


1500 characters remaining