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I paid off my home.I have excellent credit. What type of loan makes most sense for home improvemnts?

I have savings but, I don't know if it makes more sense to use my savings or secure a loan. As stated I have excellent credit but, I have limited income. My local bank does not do HELOC'S on paid off mortgages. Any informative suggestion would be much appreciated. Also, any suggestions on lenders would also be appreciated.
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April 30 2013 - Pacifica
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Yes, if you went with a HELOC, you could refinance later if the interest rate became too high. 

And being that the payments are interest-only and no principle, your monthly payment will decrease if you do pay principle.  Your monthly payment is calculated on your outstanding balance rather than a fixed amortization schedule.
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April 30 2013
Talk to a local bank or credit union about a fixed rate home improvement loan. Virtually no closing cost and no pre payment penalty.
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April 30 2013
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If I went with a HELOC and the interest became too high, could I then refinance to fixed loan?
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April 30 2013
I would keep trying local credit unions or small local banks in the area. One of them should be able to help you.
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April 30 2013
If you qualify, I recommend a HELOC for your home improvements.  You'll get a mortgage interest deduction up to $100,000 and you can keep your cash and investments safely where they are by putting your home's equity to work for you.

US Bank does 1st mortgage HELOCs, but Schwab has the best rate and fees.  I don't know that they won't do one in first position.  You can apply online or over the phone with Schwab.

I don't believe you'll need a broker to use US Bank, but I would try Schwab first.  You can do this with them directly over the phone. 

Good luck!
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April 30 2013
Depends on how much you plan to borrow and how long you plan on keeping the debt. 

Mortgages are more expensive up front but the low borrowing rate makes sense in the long term. Home Equity line are usually tied to the Prime rate and are typically higher than a fixed mortgage rate but the up front cost is little to none. 

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April 30 2013
 
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