Many homeowners have taken advantage of Home Equity Credit Lines (HELOCS) in the past few years. The rates, while adjustable, have been extremely low. Right now I have a HELOC at prime minus .75% which is $4.25% (I think) and I have seen some banks offering prime minus 1% HELOCS.
When refinancing, you should know that in addition to doing a CEMA on the first mortgage, a CEMA can also be done on the HELOC. This is true even if you are getting one loan to pay off your first mortgage and HELOC. Just make sure that the additional costs of doing the CEMA on the HELOC do not outway the gain. For example, Citimortgage charges $600 to process the CEMA documents so it would not make sense to do a CEMA unless your HELOC is sizeable.
When purchasing a house or Condo, do the same math if your Seller has a HELOC. Doing a CEMA on a HELOC is the same as on a first mortgage so please refer back to my prior posts.
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