05-30-2008, 01:38 AM
Let's say that I want to buy a new Mac, but I need to modify my home by adding a second floor with a bedroom and bathroom so that the Mac has a nice place to stay. What are the pros and cons to a Home Equity Loan vs. Refinancing the existing mortgage to get money for the project? I know that HELOCs would require an interest rate that is pegged to the Prime rate. My current mortgage is actually at a REALLY good rate, so I'm hesitant to give that up. Let's also assume that this is my first home, it is in a great neighborhood, but my home is the worst home on a block of very nice homes, so it would probably increase the value substantially. We'll also mention that my town has been almost completely unscathed by the recent mortgage implosion, but it also felt no effects from the crazy housing bubble either.