Interest rates are falling again, and many Albuquerque homeowners are now deciding on what they should do with the equity they’ve gained in their homes. Some homeowners are considering using that equity for home improvement projects, bill consolidation or for a college education. Whatever their needs may be, homeowners are looking to tap into that equity. But, should the homeowners do a full-refinance, take out a second mortgage? Indigo Mortgage can help you with that tough decision!

The answer to this depends on your first mortgage and how much equity you intend to tap into. A full-refinancing could be a lower or higher interest rate. Depending on how much you are borrowing and what the new payment looks like, a full refinance may be worthwhile.

To calculate this, you will need to determine what the payment will be on a full-refinance using today’s’ rates including the cost of cashing out and closing costs. From there, look at what the payment would be on a second mortgage while leaving the first mortgage in place. Then, add the second mortgage payment to the current first mortgage payment. Then, compare the second to determine which will fit your budget better. It’s just that easy!

If you choose a second mortgage, there are some things to consider. Clients need to make sure it’s a fixed-rate second mortgage and not a HELOC (Home Equity Line of Credit). HELOCs carry a variable rate.

If you’re shopping for a full-refinance, make sure to use a local Albuquerque Mortgage company, like Indigo Mortgage. Indigo Mortgage will give you an honest evaluation and assist you instead of trying to sell you a loan. Indigo Mortgage will provide you with accurate information and won’t try to sway you one way or the other.