Okay, so here's what happened. You took out a home equity line of credit a few years ago when rates were different, or maybe your draw period is ending and those payments are about to jump. Now you're wondering if refinancing makes sense. Let me simplify this for you.
A HELOC refinance means replacing your existing home equity line of credit with a new loan, potentially with better terms. Think of it like hitting the reset button on your borrowing, but with the advantage of knowing more about what you need this time around.
According to the Federal Reserve Bank of New York's Q2 2025 Household Debt and Credit Report, HELOC balances reached $411 billion at the end of June 2025, up $9 billion from the previous quarter. This represents the thirteenth consecutive quarterly increase in HELOC balances, reflecting how homeowners are increasingly using these products to access their home equity without disrupting low first mortgage rates.
Here's the human side of this: refinancing isn't just about numbers on a spreadsheet. It's about breathing room in your budget, about not lying awake wondering how you'll handle those increasing payments when your draw period ends. In my work coordinating projects across our teams at AmeriSave, I've seen how much stress high variable payments can cause families.
The landscape has changed dramatically. With average home equity now at record levels and many homeowners holding first mortgages at 2-5% rates, HELOCs have become the primary way to access equity without giving up favorable first mortgage terms. More homeowners are accessing HELOCs now than at any point since the early 2010s, which means more people will eventually face the refinancing decision you're considering now.
The timing might actually work in your favor right now. Let me break down why refinancing could be worth considering this year, based on current market conditions.
The Federal Reserve began cutting its benchmark interest rate in September 2024 after years of increases to combat inflation. Since HELOCs have variable rates tied to the prime rate, which moves with Federal Reserve policy, these rate cuts directly impact your borrowing costs.
According to the Federal Reserve's policy decisions throughout 2024 and into 2025, the central bank reduced rates by 100 basis points from their peak. While the Fed paused rate cuts in early 2025, market expectations suggest additional cuts may occur later in the year depending on economic conditions.
Think of it like this: if you're currently paying a higher rate on your HELOC from when rates peaked in 2023 and 2024, refinancing now captures some of that rate decline. On a $50,000 balance, even a 1% rate reduction saves roughly $40 monthly, or about $480 annually. That's real money that could go toward actually paying down the principal instead of just covering interest.
Home prices have continued rising in most markets despite higher interest rates. The Federal Reserve's Consumer Credit Panel data shows homeowners have accumulated substantial equity, with mortgage originations totaling $458 billion in Q2 2025 alone.
If your home has appreciated since you took out your original HELOC, you likely have more equity available, which could mean better loan terms or access to additional funds if needed.
Here's something I learned while studying systems thinking in my MSW program: you have to look at the whole picture, not just one piece. Most homeowners currently have first mortgages with rates between 2% and 5%. According to Freddie Mac's Primary Mortgage Market Survey, 30-year fixed mortgage rates averaged 6.22% in the weeks of late 2025.
Doing a cash-out refinance would mean giving up that low first mortgage rate for something significantly higher, which makes no financial sense. This is exactly why HELOC activity has surged. The Federal Reserve data shows HELOC balances rose by $6 billion in Q1 2025 alone, marking the twelfth consecutive quarter of growth. You're not alone in looking at this option.
Many homeowners refinance specifically to convert from a variable-rate HELOC to a fixed-rate option. When I work with teams on project planning, we always value predictability. The same applies to your family budget. If you're tired of wondering what your payment will be each month as rates fluctuate, refinancing to a fixed-rate home equity loan eliminates that uncertainty.
The short answer is yes, but you'll need to meet certain requirements. Lenders evaluate several factors to determine if you qualify. Let me walk you through what you'll need.
Most lenders want you to maintain at least 20% equity in your home after the refinance. This is calculated using your combined loan-to-value ratio, often called CLTV. Here's how it works:
Let's say your home is worth $400,000. You have $250,000 remaining on your first mortgage and $40,000 on your HELOC. Your CLTV is:
($250,000 + $40,000) ÷ $400,000 = 72.5%
Since 72.5% is below the typical 80% maximum CLTV, you'd likely qualify based on equity. However, if your CLTV is above 80%, you may face higher rates or need to reduce your loan amount.
Your lender will require an appraisal to determine your home's current value. Appraisal costs typically range from $300 to $500 according to Department of Housing and Urban Development (HUD) typical closing cost data, though this varies by location and property type.
The textbook answer is that you need a credit score of 680 or higher to qualify. But really, your score significantly impacts your rate. Even a 20-point increase in your credit score could reduce your rate by 0.25-0.5%, saving hundreds annually.
On a $50,000 balance, that 0.75% difference equals about $31 per month, or $375 annually.
Here's what this means for you: if your credit score has improved since you took out your original HELOC, refinancing becomes even more attractive. Conversely, if your score has dropped, you might not see the rate improvement you're hoping for.
Lenders evaluate your debt-to-income ratio, or DTI, to ensure you can handle the payments. According to Consumer Financial Protection Bureau (CFPB) guidelines, most lenders prefer a DTI ratio of 43% or lower for home equity products.
Your DTI is calculated by dividing your total monthly debt payments by your gross monthly income. For example, if you earn $8,000 monthly and have $2,800 in debt payments including the proposed HELOC payment, your DTI is 35%, which generally qualifies.
If your DTI is borderline, paying down some debt before applying could make the difference between approval and denial, or at least help you secure a better rate.
Your record of on-time payments demonstrates financial responsibility. Late or missed payments can remain on your credit report for up to seven years according to federal credit reporting rules. If you've struggled with payments on your current HELOC, lenders may be hesitant to approve a refinance, or they may offer less favorable terms.
What this means practically: if you're considering refinancing, prioritize making all your current payments on time for at least six months before applying. This shows lenders you're a reliable borrower and can improve your chances of approval.
Be prepared to document your income through recent pay stubs, W-2 forms, or tax returns if you're self-employed. Lenders want to confirm you have stable income to support the new loan payments. The more documentation you provide upfront, the smoother your application process typically goes.
You have several options for refinancing, each with distinct advantages and considerations. Let me break down each method so you can evaluate which might work best for your situation.
This approach means taking out a fresh HELOC to pay off your existing one. Some lenders even allow you to transfer your current balance into a new HELOC with improved terms.
How it works: You start a new draw period with the new HELOC, typically 5-10 years. During this time, you only make interest payments, with principal payments beginning once the repayment period starts.
Advantages:
Disadvantages:
Best for: Homeowners who value flexibility and anticipate needing access to additional funds in the future. This works especially well if you're in the middle of a home renovation project or expect other major expenses.
One advantage of this approach is that you can open the new HELOC and do the minimum draw if you think rates might drop further, then access more cash later when rates settle at more favorable levels.
A home equity loan functions like a second mortgage. You receive a lump sum upfront and repay it with fixed monthly payments at a fixed interest rate.
How it works: The lender pays off your HELOC balance, and you begin repaying the home equity loan immediately. Your payment amount stays the same throughout the loan term, typically 5-30 years.
Advantages:
Disadvantages:
Best for: Borrowers who prioritize predictable payments and have a clear plan to pay down the debt without needing additional borrowing flexibility. This works well if you're approaching or in retirement and want stable housing costs.
With a cash-out refinance, you replace your first mortgage with a larger loan and use the extra funds to pay off your HELOC. You'll have one monthly payment instead of two.
How it works: Let's say your home is worth $400,000, you owe $200,000 on your first mortgage, and have a $50,000 HELOC. You refinance your first mortgage for $250,000, use the extra $50,000 to pay off the HELOC, and now have just one mortgage payment.
Advantages:
Disadvantages:
Best for: Homeowners whose first mortgage rate is already close to current market rates, or those who highly value the simplicity of a single payment. This rarely makes sense in the current rate environment unless your first mortgage is relatively new.
Similar to a cash-out refinance, but explicitly structured to merge both loans. This essentially creates one consolidated mortgage that replaces both your first mortgage and HELOC.
How it works: The lender creates a new first mortgage that covers both balances, giving you one loan with new terms and a potentially different interest rate.
Advantages:
Disadvantages:
Best for: Borrowers with first mortgages at higher rates who can genuinely benefit from refinancing everything. You'll need to carefully calculate the break-even point, considering all closing costs, to determine if the savings justify the expense.
At AmeriSave, our team can help you evaluate these options to see which makes the most financial sense for your specific situation, including running the numbers on break-even points and total interest costs over time.
Walking through the actual refinancing process helps demystify what can feel overwhelming. Here's what you can expect from application to closing.
Before you apply, gather key information. Calculate your current home equity by subtracting your mortgage balance and HELOC balance from your home's current value. Check your credit score, ideally aiming for 740 or higher for the best rates. Review your debt-to-income ratio to ensure it's below 43%.
Create a clear picture of your goals. Are you primarily seeking a lower rate? Want to switch to fixed payments? Need to extend your repayment term? Your goals will guide which refinancing method makes the most sense.
This is crucial. According to the Consumer Financial Protection Bureau (CFPB), shopping around can save you thousands over the life of your loan. Contact at least three to five lenders to compare rates, terms, and fees.
Pay attention to more than just the interest rate. Some lenders advertise low rates but have higher fees that offset any rate savings. Request a Loan Estimate from each lender, which provides standardized information making comparison easier.
Don't forget your current HELOC lender. They may offer favorable terms to keep your business, especially if you've been a reliable borrower. It never hurts to ask.
Once you've selected a lender, complete the formal application. You'll need to provide:
The more organized your documentation, the faster this process moves. Digital copies that you can email typically speed things up compared to mailing physical documents.
The lender orders an appraisal to verify your home's current value. An appraiser visits your property, evaluates its condition, and compares it to recent sales of similar homes in your area.
Appraisal costs vary by location but typically range from $300-$500. Some lenders waive the appraisal requirement if you recently had one done (usually within the past 6-12 months) and meet certain criteria.
If the appraisal comes in lower than expected, it could affect your loan amount or terms. This is why it's helpful to keep your home well-maintained and make sure the appraiser sees any improvements you've made.
The lender's underwriting team reviews your complete application, verifying your income, assets, debts, credit history, and property value. They may request additional documentation if something needs clarification.
This is often the longest part of the process, so don't panic if you don't hear anything for a week or so. The underwriter is simply being thorough to ensure you meet all lending requirements.
Once underwriting approves your loan, you'll receive a Closing Disclosure at least three business days before closing. This document details your final loan terms, closing costs, and monthly payment amount. Review it carefully and ask questions about anything unclear.
At closing, you'll sign the final paperwork, pay closing costs (typically 2-6% of the loan amount), and your new loan pays off the old HELOC. The entire process from application to closing typically takes 4-8 weeks, though this varies by lender and situation complexity.
On a $50,000 refinance, you might pay $1,500-$3,000 total in closing costs. Some lenders offer no closing cost refinances where they cover these fees in exchange for a slightly higher interest rate. Run the numbers to see which approach saves you more money over time.
After years coordinating complex projects, I've learned that preparation makes everything go smoother. Here are practical tips that can save you money and hassle during the refinancing process.
Rate trends matter. According to Federal Reserve monetary policy statements, while the central bank paused rate cuts in early 2025, additional rate adjustments remain possible depending on economic conditions. However, timing the absolute bottom is nearly impossible.
If current rates offer meaningful savings compared to your existing HELOC, consider moving forward rather than waiting for hypothetical future drops. Missing months of potential savings while waiting for rates that may or may not drop further could cost you more than any additional rate decrease would save.
Even small credit score improvements can significantly impact your rate. A 20-point increase in your credit score could reduce your rate by 0.25-0.5%, saving hundreds annually.
Most credit score improvements take at least 30-60 days to fully reflect in your reports, so start this process early.
Don't just look at the interest rate. Calculate your total costs including closing fees to determine your break-even point.
Example: If refinancing costs $2,000 in closing costs but saves you $150 monthly, your break-even point is about 13 months ($2,000 ÷ $150 = 13.3 months). If you plan to stay in your home for several more years, this makes sense. If you're selling within a year, you won't recoup the costs.
AmeriSave's online tools can help you calculate these numbers precisely for your situation, showing you exactly when you'll start seeing net savings.
Lenders sometimes offer better rates on HELOCs with shorter draw periods (5 years vs. 10 years). If you don't anticipate needing to reborrow funds, accepting a shorter draw period could lower your rate.
For example, a 5-year draw might offer rates 0.25% lower than a 10-year draw. On a $50,000 HELOC, that's about $10 monthly in savings, or $120 annually.
Many closing costs are negotiable. Ask lenders to waive or reduce application fees, origination fees, or annual fees. As a repeat customer (if refinancing with your current lender), you have leverage to negotiate.
If you're considering methods that involve refinancing your first mortgage (like a cash-out refinance or combining loans), carefully evaluate the impact.
Most homeowners currently have first mortgages with rates between 2-5%. According to Freddie Mac's Primary Mortgage Market Survey data, refinancing these into current rates around 6-7% just to consolidate with a HELOC rarely makes financial sense. The increased interest cost on your first mortgage typically far exceeds any savings from eliminating the HELOC.
Exception: If your first mortgage rate is already 6% or higher, consolidation might make sense. Run detailed calculations or consult with a financial advisor to be certain.
Refinancing isn't always the answer. Here are situations where you might want to explore alternatives or stick with your current HELOC.
If your existing HELOC rate is already competitive with current market rates, refinancing may not save you enough to justify the closing costs.
If you're selling within 12-24 months, you might not recover your refinancing costs before selling. The break-even calculation becomes critical here.
If your home has lost value since you took out your original HELOC, you might not qualify for refinancing or may only qualify for a smaller loan amount. Declining home values reduce your equity, potentially pushing your CLTV above the 80% threshold lenders prefer.
If your credit score has dropped significantly, your debt-to-income ratio has increased, or you've missed payments, you might not qualify for favorable refinancing terms. In this case, focus on improving your financial situation before applying.
Refinancing requires time, effort, and paperwork. If you'd only save $30-50 monthly, consider whether that justifies the hassle. Some people value simplicity and would rather keep their existing loan rather than go through the refinancing process for modest savings.
Before committing to a full refinance, explore these alternatives that might address your needs with less complexity or expense.
If you're struggling with payments or facing financial hardship, contact your current lender about a modification. This means adjusting your existing loan terms without taking out a new loan.
Modifications work best when you have a legitimate hardship (job loss, medical emergency, divorce) and can demonstrate you'd be able to afford modified payments. The advantage is minimal or no closing costs, though modifications typically require all borrowers on the loan to agree to changes.
Many HELOC lenders offer the ability to convert all or part of your balance to a fixed rate without a full refinance. This is sometimes called a lock feature.
You might convert your $40,000 HELOC balance to a fixed rate while keeping the line of credit available for future borrowing needs. This gives you payment predictability without losing flexibility. Check with your current lender about this option, as it's often simpler and cheaper than refinancing.
If your HELOC balance is relatively small (under $20,000) and you have good credit, a personal loan might work. According to Federal Reserve consumer credit data, personal loans typically have fixed rates and terms of 2-7 years.
Personal loans usually have higher interest rates than HELOCs (often 8-15% depending on credit), but they offer:
The math only works if you can get a personal loan rate close to or below your current HELOC rate, which is increasingly possible as prime rates have risen.
If managing both a first mortgage and HELOC has become overwhelming, and refinancing doesn't provide enough relief, selling might be the most practical solution.
This is obviously a major decision, but for some homeowners, moving to a more affordable home eliminates debt stress. You'd pay off both loans with the sale proceeds and potentially have a fresh start with lower housing costs.
If you're 62 or older, a reverse mortgage can replace your HELOC. With a reverse mortgage, you receive a line of credit without monthly payments. The loan is repaid when you sell, move, or pass away.
According to Department of Housing and Urban Development (HUD) guidelines, reverse mortgages can be structured as lines of credit, offering flexibility similar to HELOCs without payment obligations.
But reverse mortgages cost a lot of money. The fees to start the loan, the mortgage insurance premiums, and the interest rates are usually higher than those for regular mortgages. They also lower the amount of money you'll leave to your heirs. Think about this option carefully and talk to a HUD-approved counselor before you go ahead.
Some families borrow money from relatives as a last resort. This is obviously risky for relationships, but it might work in some cases. If you go this route, make it official with a written agreement that spells out the following:
Having clear terms protects both sides and helps keep family relationships from getting hurt by misunderstandings.
Refinancing your HELOC is a big financial decision that you should think about carefully. The good news is that you're not the only one thinking about this option. The Federal Reserve is paying attention to the economy and HELOC activity is at its highest level in years.
This is how to go on:
First, figure out how much you could save. Talk to lenders to find out exactly how much money you'd save each month and how long it would take to get your closing costs back. Refinancing probably makes sense if the numbers work in your favor and you plan to keep the loan for a few years.
Look at your credit report and score. Fix any mistakes or problems before you apply. If you need to raise your score, work on it for a few months before refinancing. You'll be able to get a better rate if you wait.
Look at more than one lender. Don't think that your current HELOC lender has the best deal. Get quotes from at least three to five lenders. Compare not only the interest rates, but also the fees, loan terms, and customer service.
Think about the timing. That might work if you can wait a few months without too much trouble and the rates are likely to keep going in a good direction. But if you're having trouble making your current payments or could save a lot of money right now, waiting for things to get better in the future might cost you more than it saves.
Think about what you want to do in the future. Refinancing might not be a good idea if you're going to sell your home in the next 12 to 24 months. If you plan to stay in one place for a long time, even small monthly savings can add up to a lot over time.
At AmeriSave, we can help you figure out if refinancing your HELOC is a good idea for your goals and your situation. We can help you through the whole process by giving you detailed calculations, up-to-date information, and advice. This makes what can seem like a lot of work much easier to handle.
The most important thing is to act based on what you know, not what you feel. Take your time, do the math carefully, and choose the option that best helps you reach your financial goals and gives you peace of mind. In the end, that's what matters most: not just getting a different rate, but also making a financial plan that works for your life.
Yes, for sure. If the current situation is better than when you opened your HELOC, refinancing during your draw period can actually be a smart move. The new HELOC will essentially start a new draw period for you, which will give you more flexibility and possibly better terms. Just so you know, restarting the draw period will make the time you have to pay back the loan longer. The most important thing to think about is whether or not you really need the longer draw period. If you don't plan to borrow more money, it might make more sense to switch to a home equity loan with a fixed rate instead of starting a new HELOC draw period. Many homeowners refinance because they want to lock in a fixed rate before they start paying back the loan, when payments can go up a lot. When you draw, you usually only pay interest. But when you start paying back the loan, you pay both principal and interest, which makes your monthly payments much higher.
Closing costs will be between 2 and 6 percent of the amount of your loan. For a fifty thousand dollar HELOC refinance, that usually means paying between one thousand and three thousand dollars in fees. These costs include the appraisal fee, which is usually between $300 and $500, as well as origination fees, title work, credit report fees, and recording fees. Some lenders say they offer refinances with no closing costs, but what they really mean is that they add the closing costs to your loan balance or charge you a little more interest to cover these costs. There is no clear winner between the two methods. It all depends on your situation. If you don't have a lot of money right now but want to keep the loan for a long time, paying a little more might work. Paying closing costs up front usually saves you money over time if you have the cash and want the lowest rate possible. Take your time figuring out your break-even point. If your closing costs are $2,500 and you save $175 a month by refinancing, you'll break even in about 14 months.
Yes, but only for a short time and not very much. The lender will do a hard inquiry on your credit report, which usually lowers your score by five to ten points for a short time. As long as you pay your new loan on time, your score will usually go back up within a few months. The biggest effect on your credit score comes from how refinancing changes your credit utilization ratio. Your utilization ratio may get better if you refinance to pay off your HELOC or consolidate your debts. This could raise your score. On the other hand, if you refinance and borrow more money, your utilization might go up, which could lower your score for a short time. If you make all of your payments on time and don't take on more debt, your credit will generally improve over time. FICO scoring models say that payment history is the most important part of your credit score, making up thirty-five percent of the total. If you shop around for rates and make several credit inquiries in a short amount of time, they are usually counted as one inquiry. So don't worry about shopping around hurting your score.
It's hard, but it can happen sometimes. Your combined loan-to-value ratio goes up a lot if the value of your home has gone down. When you got your HELOC, your home was worth $400,000. Now it's worth $360,000. Your CLTV is now 83% instead of 75% if your mortgage balance is $250,000 and your HELOC is $50,000. Most lenders want CLTV to be less than 80% in order to offer good refinancing terms. If your CLTV is over 80%, you may still be able to qualify, but you'll have to pay off your balance to lower it or pay higher interest rates. Some lenders will work with borrowers who have CLTVs up to 85% or even 90%, but the rates are much higher and the requirements to qualify are much stricter. If your home's value has dropped a lot, it might be better to pay down your HELOC balance instead of refinancing. Refinancing becomes more possible as your balance goes down and property values stay the same or go up.
In 2026, this is the question on everyone's mind. Because HELOC rates are tied to the prime rate, the Federal Reserve's monetary policy has a direct effect on them. The Fed cut rates three times in late 2025, but future policy decisions will depend on things like inflation and job growth. This is what you should think about. If you could save $100 to $200 a month by refinancing today instead of keeping your current HELOC, that's real money you're missing out on every month while you wait for rates to go down. That's six hundred to twelve hundred dollars in missed savings over six months. The risk of waiting is that rates might not go down as expected, or they might only go down a little. In the meantime, you're paying more interest each month. If things get better, waiting might get you an even better rate. If current rates are at least one percent lower than your current rate, I say you should refinance now. If rates drop a lot, you might be able to refinance again later, but you'd have to pay closing costs twice.
The new loan pays off your current HELOC in full, and that account is closed for good. At closing, your old lender gets the full amount, which usually happens within twenty-four to forty-eight hours of you signing the last paperwork. You get the new loan product you chose, which could be a new HELOC, home equity loan, or refinanced mortgage. Make sure that all three credit bureaus get the right information from your old HELOC lender that the account has been paid in full. To make sure this went through correctly, check your credit report about 30 to 60 days after you refinanced. Sometimes lenders take a long time to update their reports, so you need to make sure your credit file shows that the old loan is closed. If you had automatic payments set up for your old HELOC, make sure to cancel them so that you don't accidentally make payments after the account is closed. If you like the ease of automatic payments, you can start over with your new loan. Once you close your old HELOC account, any unused credit line disappears. So, if you think you might need to borrow more money soon, keep that in mind when you decide to refinance.
Yes, if you still have enough equity in your home. People sometimes call this a cash-out refinance of your HELOC. You may have more equity now than when you first took out your HELOC if your home has gone up in value or you've paid off your first mortgage. For instance, if your current HELOC balance is $40,000 but you qualify for a $60,000 HELOC based on the value of your home and the amount of equity you have in it, you could refinance to the higher amount and get $20,000 in cash at closing. But you should really think about whether you really need the extra money. Taking out more money means higher monthly payments and a longer time to pay off your debt. If you need extra money for a specific reason, like a big home improvement that will add value, medical bills, or consolidating debt at a lower rate, then you should only take it. Don't borrow more money just because you can. If you use home equity for discretionary spending or consumer purchases and then have trouble making payments, your home could be at risk. Keep in mind that your home is the collateral for this loan.
If you have the money to pay off your HELOC in full, that's almost always better for your finances than refinancing. You wouldn't have to take out a new loan or pay closing costs, and you'd be free of the debt, save all future interest payments, and free up your home equity. But most people who are thinking about refinancing don't have tens of thousands of dollars in cash on hand to pay off their HELOC right away. Refinancing is a way to deal with debt that you can't pay off right away. It makes it more affordable by giving you better terms while you keep paying it off over time. If you have some extra cash but not enough to pay off the whole HELOC, you might want to use that money to pay down the balance a lot before refinancing. A lower balance means lower closing costs because they are usually based on the loan amount, and lower monthly interest payments. If you pay off five or ten thousand dollars before refinancing, it can make a big difference in both your closing costs and your monthly payment on the new loan.
No, you can definitely refinance with a different lender, and you should often look around. Your current HELOC lender may offer you good terms to keep your business, but they may not have the best rates on the market right now. Getting quotes from at least three to five different lenders can help you make sure you're getting a good deal and not losing money. It's worth the time to compare different lenders because they all have different underwriting criteria, rate structures, and fee schedules. The Consumer Financial Protection Bureau (CFPB) has found that borrowers who shop around usually save thousands of dollars over the life of a loan. You don't have to stay with your current lender out of loyalty or convenience. Lending is a business, and lenders know that borrowers look for the best deals. It's good to know if your current lender can't match offers from other lenders. When you look at offers, make sure you're comparing apples to apples. Look at the whole picture, including rates, fees, terms, and any special features or requirements that each lender has.
This all depends on how you refinance and the terms of your new loan. If you refinance to a lower interest rate with the same or a similar repayment term, your payment should go down. This is the easiest benefit of refinancing when rates have gone down. If you switch from a HELOC, where you might only be paying interest during the draw period, to a home equity loan or enter the repayment phase, your payment will probably go up because you're now paying both principal and interest instead of just interest. If you make your payments over a longer period of time, your monthly payment may go down, even if your interest rate stays the same. This is because you're spreading the payments out over more months. However, you'll pay more interest overall over the life of the loan. If you borrow more money when you refinance, your payment will probably go up because you're borrowing more money overall. Before you choose a refinancing plan, make sure to do the math carefully. Your lender should give you detailed payment projections that show exactly how much your new monthly payment will be, including the principal, interest, and any escrow amounts that may apply. If you're refinancing into a new HELOC, make sure you know if the payment you're being quoted is for the draw period or the repayment period.
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