REFINANCE MORTGAGE & HELOC?

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About 2 months ago i went to my bank to look into a refinance. I have a high FICO score and was quoted a rate of about 5%. My current rate is 6%. My loan is not moving very fast although i know it is finally in underwriting because they called needed clarification on a document i gave them.

I currently have a HELOC (Home equity line of credit ) of $ 14k and need to tap into it for some home repairs. I currently have a $ 0 balance on it. I don’t know if I can use it during the refinancing process and I can’t get the bank to call or email me back. I get the standard response “due to high call volume and refinances, we can not guarantee a call back until your loan is ready.” I have paid no fees up front and i have not even locked in a rate. Should I

a) go ahead and use my HELOC

b) scratch the entire refinance idea

c) stalk the bank until they call back?

Any suggestions? Can you refinance with a balance on your HELOC? What if that balance is incurred in the middle of the refinance?

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2 Comments
  1. Reply
    blibityblabity
    May 17, 2011 at 8:43 am

    It depends on your equity in your home. Your HELOC will need to be repaid in the loan. If you have a lot of equity, it can still be done, just more paper work for your bank.

  2. Reply
    goz1111
    May 17, 2011 at 9:04 am

    Best bet is to hound the refinance company for an answer before committing to withdrawal of the equity line, read the documents signed for the refinance process,

    In general if you have a first and second lien, meaning taking out the equity line, the first legally can not change the terms i.e. refinance without approval of the second lien holder, well they can but must change lines in the right to property i.e. equity becomes senior and first is now junior, in the old days with housing prices increasing it was common for second to waive right, in these times who knows but tapping equity line could crush your refinance, or it may not

    Call the lender

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