refinancing

Getting a home equity loan means that you are taking out the value of your equity at a particular interest rate and then repaying the loan. Instead of the bank giving you the money, for example, you are getting the money out of your house. If you miss payments, they can and will foreclose on your home, take it from you.

Refinancing is a way to “re-do” your home loan. If you started out with a 30 year, fixed rate loan with interest of 12% say, and now, your credit has improved and you want to get a lower interest rate, say 7%, you can go and apply to refinance the loan. If approved, you get the lower interest rate and thus, lower home payments.

There are many different combinations of loans out there, but all in essence, lower your payment. That is why most people do it. The money you are no longer paying on your mortgage, you are free to use for whatever else you choose.

That is simplified, but covers it. Herlean