You might be thinking that with interest rates at record lows right now, now might be the best time for you to refinance your home equity loan. This is definitely true if you are in a position to do so.
But there are some things you need to consider first.
Even though your payments will be lower if you refinance at a lower rate, your income streams need to be secure enough. You will need to meet the monthly payments for the term of the loan.
The value of your home needs to be high enough for the bank to accept it. If you owe more than your house is worth because you got the home equity loan when home prices were higher, you probably will not be able to refinance the whole amount. If you are still paying for your first mortgage and this one is 85% or less of your home’s value, then you might be able to refinance that one and get the benefits of these low rates.
Make sure your credit score is up to par. It needs to be as close to perfect as possible. The lower your score, the higher your rate will be which may be higher than what you are currently paying. There are credit repair companies that will help raise your score if you need it. This will benefit you in more ways that refinancing your home equity loan.
If you are getting the adjustable type, keep in mind that your payments can change every month because your rate is not fixed. Seeing that rates are so low now, they are bound to go up at any time. If they do start going up, you need to prepare yourself to pay more later on.
Pick your loan officer carefully as he or she can have a big impact on the deal you get. A good one will not be afraid to get you into the best one, even if that means there is less rebate money coming in. Really, a good one will pass on the savings to you. If you have special circumstances, while others may decline you on the spot, a good one will work with you and try to come up with solutions. It may take a bit longer and it may take a few more steps, but if they are looking for a long term business relationship, then it will be worth it both for you and for them.

