Second Mortgage/home Equity Vs. Refinance

Why should you take out a second mortgage or a home equity line of credit instead of refinancing? Well,You Shouldnt!! Why Not? . Second Mortgages usually have an interest rant that is twice or even three times as high as your first mortgage rate. You can refinance instead and keep a very low rate. In the long run a second mortgage will just cost you money in interest charges. . Home equity lines of credit are designed for mortgage account executives (salespeople) to sell you on using it like a credit card attached to your home. They will try to convince you to use it over and over again. . A refinance loan is better for the equity in your home. Very few companies will refinance your home at % of its value without forcing you to take out a second mortgage. You dont want to use % of your equity because that means you no longer have that equity to fall back on in emergency situations. . Second Mortgages and Home Equity lines of credit are designed to provide account executives (salespeople) with another tool to sway you into putting another commission in their pocket. . Your equity is a precious thing and should not be used for unnecessary add ons or impulse buys. If you dont need it and there is even a slight chance you cant afford it, then dont get a second mortgage to buy it. The only reason that I would ever recommend a second mortgage or a home equity line of credit is in an emergency situation. Only when there is no other option and you must take out a loan would I recommend either one of these options.