Before you decide on refinancing your home you may want to call your
creditors and ask them to lower the interest rate on your credit cards.
Always save promotions from credit card companies; you may never know
when you need it.
So what loan should you choose? Interest Only Loans have been a
favorite for some people who plan on a short stay in their house. These
loans can have incredibly low payments for the first ten years. Some
will include a balloon payment at the end of that term, while others
convert to a conventional interest plus principle loan for the rest of
Another option, if you plan on staying in your home longer, is the
Equity Line of Credit. These loans may include an adjustable rate
mortgage until the rate is locked in for the rest of the term. There
may be several locks for the first ten years, and then the loan may
convert to a fixed rate mortgage.
The beauty of the equity line of credit is that if an emergency comes
up, you have the equity in your home at your fingertips. All you need
to do is write a check. In most cases, after you write a check the
money is drawn as a loan and goes directly to your balance.
Adjustable rate mortgages can also save the homeowner on their monthly
payments. These loans typically are used for buyers who expect to make
more money in the future but need lower payments right now. If you feel
interest rates are going to go up, this is a bad loan. There are
provisions in the loan that can lock in the maximum monthly increase in
premiums and maximum yearly interest rate increases. There may be other
measures that prevent the homeowner from being swamped with huge payment
There are endless types of loans to choose from. Picking the right loan
can save you both grief and money.