Refinancing- Questions
Question: What are the advantages of refinancing in regards to home improvement? Due to my credit history , I was offered to refinace at 11% which is to higher than my present mortgage? I badly need a new roof, but what to get it with the least debt . I have tried saving, but it is not working out. Any suggestions?
Answer: IF you have equity in the home and need more money than you have available, AND it is for home improvements, I would look at a home equity loan rather than refinancing the primary mortgage. (At least in this situation where the credit rating is not as good as it could be) You would have a lower amount of money borrowed at the higher rate, and you should tailor the length of the loan so that it will be paid off in a much shorter time frame. Generally, if the total amount borrowed against the home is less than the appraised value of the home, AND the proceeds of the home equity loan are used for home improvements, then you can deduct your interest on the home equity loan in addition to your mortgage interest.
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Filed under: Home Equity Loan
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