Can a HELOC be converted to a mortgage?
I have no mortgage on my home, but about a $50,000 HELOC loan at 7.25%. Could I convert this to a conventional mortgage on my home, possibly getting a better interest rate?
- loanmasteroneLv 71 decade ago
You might convert this HELOC to a conventional mortgage by apply for and getting approved for a new first mortgage. Getting a new first mortgage would pay off the existing HELOC. If you don't want any cash out at your refinance then you are looking for a rate and term refinance.
There might be a problem with the loan amount as most lenders would want a higher loan amount.
The best thing to do is apply for a rate and term refinance, with the low loan amount you might have to take some money out as a cash our refinance.
When you speak with a loan consultant ask if they have mortgage program for low loan amounts such as the $50,000 loan amount that you have. With fees,point and other closing cost your loan amount would be approximately $52,000 to perhaps $53,000 at closing.
I hope this has been of some benefits to you, good luck.
- patrickLv 61 decade ago
you can get a new first mortgage, then pay off the HELOC at closing.
however the big question is why are you paying so much for a HELOC? In most places, with a good credit score and ample equity, you should be paying between 4 and 5% for a HELOC.
Before applyiong for a new mortgage, shop HELOC's first. They have much lower closing costs.
- golferwhoworksLv 71 decade ago
converted no but refinanced into a new loan yeppers
I am a mortgage banker in TN