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I have a 175K fixed home equity in Texas with 19 years remaining on 20 year loan, how can I lower

how can I lower the monthly payment?  Are there any 30 year home equity loans being made?  I have a 6.75 interest rate.  I assume that because it is a home equity loan and in Texas that I can not refinance except as another home equity? 
  • August 29 2009 - Austin
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Answers (3)

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There are plenty of home equity loan options for you, even on a 30 year fixed. The gentlemen below are correct, it must be one year from close, and still run as a home equity, but you should easily lower your rate. Your credit score will be the factor that determines how low the rate drops.
Let me know if I can help in any way!

Rob Gerwer
Blue Star Residential Lending, Inc.
  • January 13 2010
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In addition to what Don said below, you have to wait at least 1 year before refinancing a TX home equity loan, so if it has not been at least a year since you closed on it you would not be able to close on the refi until enough time has passed.
  • August 29 2009
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Anytime in Texas when you refinance a home equity loan it is considered a home equity loan.  Once a home equity always a home equity is an easy way to remember this.

To answer your question there is no reason you cannot refinance your mortgage to reduce the interest rate.  You will be considered a home equity but you are not forced to take out any additional cash.  Essentially you can refinance the home just as  you would if you did not have a home equity but your lender will treat it as a home equity loan even if no additional cash is being pulled out of the loan this time.

Rates on a home equity loan can be the same or higher than a traditional refinance.  The difference will be determined by your credit scores and and the loan value (LTV) of the loan.  The higher your credit scores and the lower the LTV the more likely you will qualify for a rate that is similar to a traditional refinance rate.  Also note that you are capped at an 80% loan value.  So if you did refinance a little over a year ago at 80% you would need to be careful in evaluating if you can refinance now without having to go over that loan value or you would need to bring cash to closing.

So you should definitely look into the possibility of refinancing because there may be room for improvement of your current rate of 6.75% depending on your situation.

Don Groff
360 Lending Group
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  • August 29 2009
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