No matter what your credit situation, you can refinance your home equity line of credit. Trading in the unpredictability of adjustable rates, you can refi for secure rates. You also have the option to restructure your debt, enabling you to get out of debt sooner or to extend your terms for more manageable payments.

When Does Credit Matter?

Your credit score won't prevent you from refinancing since you already have the security of your home to back your refi. Poor credit will affect the rates you can qualify for. However, you can overcome this with a few tips.

First of all, carefully search out loan quotes to find the lowest rates. You don't want to base your decision on publicly posted rates since they don't apply to your credit situation. Instead, request loan estimates based on your unique credit profile, just don't allow access to your credit report at this time.

You can also trim rates by rolling over your line of credit into a second mortgage or combining it with your first mortgage. These types of loans offer better rates than line of credits, but closing costs are more expensive. Another option is to shorten your loan term to five years. Not only will you save money on actual interest charges, but you will also qualify for lower rates.

Are Lowest Rates The Only Goal?

There are many loan options that affect your financial bottom line besides rates. For instance, loan terms can save you money on interest or help you reduce your monthly payment. Ideally, you want the cheapest, shortest loan. But if finances are tight, paying additional interest to lengthen your loan may be worth it.

Peace of mind is also important to people, especially when it comes to their mortgage payments. That's why a fixed rate loan can be appealing, even if it has higher rates than adjustable rate loans. Caps, which are negotiable, also offer security for those with adjustable rates.

Closing costs and annual fees can also add to the cost of a loan. That's why you want to consider the APR to understand the true cost of the loan. With a little bit of comparison shopping on your part, you can find a reasonable refinancing no matter what your credit score is.