Interest rates have been at a historic low. If you have a home equity line of credit, you may consider taking out a home equity loan to repay it when interesst rates rise. Since interest rates on home equity lines of credit are tied to the prime rate, if rates rise, so will the interest on your loan and your monthly payment. By replacing the home equity line of credit with a home equity loan, you lock in a lower interest rate.

It is currently an excellent time to refinance your Home Equity Line of Credit or other secured line of credit product or personal loans into your mortgage, locking in a low fixed rate and saving money each month.

It is important to know when the draw period ends on your line of credit. At the end of the draw period, your loan will convert to a fixed mortgage at the current rate. You may also lose the option of making interest-only payments. Refinancing will allow you to control when you lock in.

 

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