My wife and I are trying to figure out whether to take out a home equity loan or refinance. We own a double wide trailer on five acres that has been converted to real property. Which would be better in a situation like this? What should we know? Are there risks to either?
Construction / Development Lawyer
This question may be better directed at a qualified mortgage broker, who can walk through your finances and the available loan options with you. Generally speaking, and given the current low interest rates, it may be to your advantage to refinance to a single loan -- whether fixed or adjustable -- with a low rate. It's worth noting that there is one protective advantage to having a single loan, and that is that in the event of a default, the primary lender typically will conduct a non-judicial foreclosure -- meaning a trustee's sale -- and, if the property sells for less than the loan amount, the lender will not be able to pursue you for any deficiency. A second lender -- such as a HELOC lender -- will still have a claim against you in that context.
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