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  Home Equity Basics   Chapter 3: Applying
The keys to a great rate are your credit history, your income and the loan-to-value ratio.
 
   

Refinancing a home equity loan

 

When interest rates drop, you can refinance your home equity loan and save money.

"Refinancing tends to happen in surges -- in fits and starts," says Bill Hampel, chief economist for the Credit Union National Association in Washington, D.C. "Typically, rates should fall a point or more before you do it."

Refinancing entails closing costs and other fees, so it's important to know whether lower monthly payments will offset that cost. Consider how long it will take you to break even. For example, if refinancing costs run you $2,500 and your payments are $100 lower each month, it will take you 25 months to break even.

5 reasons to refinance

-- Updated: April 1, 2006
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Home Equity
Compare today's rates
NATIONAL OVERNIGHT AVERAGES
$30K HELOC 4.67%
$50K HELOC 4.04%
$30K Home equity loan 5.00%
Rates may include points
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