Is it better to borrow against home equity when you still have a first mortgage?

Our house will be paid off next year. We have some major home improvements to do in the near future. Will borrowing costs be more if we borrow against the equity after the first mortgage is paid off, or does it matter?Is it better to borrow against home equity when you still have a first mortgage?
It all depends on the specific terms. Sounds like you have tons of equity. Odds are you can get a new first mortgage, taking out enough cash to cover the improvements, and you will be better off.Is it better to borrow against home equity when you still have a first mortgage?
If the house is almost paid off, it will probably be cheaper to take a new first mortgage to replace the present one. First loans are typically cheaper than second ones. Go see your banker and get some quotes.
It may be more cost effective to refinance your first mortgage for the cash you are going to need to do the improvements unless you are planning on repaying the improvement funds in short term. This is because 2nd mortgages and equity lines have higher interest rates.





An experienced mortgage banker willgive you a comparison of all of your options so that you may make an informed decision.
It doesn't matter. It's a second loan that doesn't affect the 1st. You might consider refinancing your 1st %26amp; getting equity out. It may be a lower interest rate that way.
refinance the first mortgage. the rate will be lower and you'll only have to make one payment per month. You'll also get a broader range of payment options depending on the amount of the loan...short term to long term. congratulations on the near term payoff!