This whole thing started because I asked a simple question and got a weird answer. I called my bank last year to ask can you refinance a home equity loan and the lady straight up said no. Told me home equity loans can’t be refinanced. I believed her for like six months before finding out she was completely wrong.
Got my home equity loan in 2021. Borrowed $44,000 to replace the roof and do some landscaping work. The rate was 8.7%. Payment worked out to $485 a month for 10 years. Not great but we needed the work done and that’s what they offered.
Fast forward to last spring. I saw an article online about refinancing mortgages. Made me think – wonder if I can refinance my home equity loan too? Rates had dropped a bit and I figured why not check.
Six Months Later My Coworker Told Me Different
This is where I found out that the bank lady was either wrong or lying. My coworker Rebecca mentioned she refinanced her home equity loan over lunch one day. Saved like $120 a month or something.
I told her that’s impossible. My bank said you can’t refinance home equity loans. Rebecca looked at me like I’d grown a second head. She said what? Of course you can. I literally just did it last month.
Showed me the paperwork on her phone. Sure enough, refinanced her home equity loan from 9.1% down to 6.8%. Used a different lender than her original one. Saved a ton of money.
Started Over With Different Lenders
Called three other lenders that same week. Asked each one the same question – can you refinance a home equity loan? All three said yes without hesitation. Made me even more annoyed at my original bank.
The first lender quoted me 7.4%. The second one quoted 7.1%. Third one – an online lender Rebecca recommended – quoted 6.9%. All of them were way better than my 8.7%.
Asked each lender why my bank said they don’t refinance home equity loans. Got different answers. One said some banks only refinance their own loans, not ones from other banks. Another said some banks just don’t offer that service even though other places do. The third one said my bank was probably just trying to keep me in my high-rate loan so they could make more money off me.
Went With the 6.9% Rate
The online lender offering 6.9% had good reviews and Rebecca used them for hers. Closing costs were $1,950. My payment would drop from $485 to $395. That’s $90 a month in savings.
The break-even point was about 22 months. After that, pure savings. Over the remaining seven years of the loan, I’d save roughly $9,500 in interest compared to keeping the 8.7% rate.
The application process was all online. Uploaded pay stubs, tax returns, bank statements. They needed proof of homeowners insurance. Did a video call with some underwriter guy who asked basic questions about my income and job.
Appraisal was done remotely somehow. They didn’t send anyone to the house. Just used recent sales data and photos from county records or something. The whole thing was approved in three weeks.
Confronted My Original Bank About It
After everything was finalized, I called my original bank back. Asked to speak to a manager. Got connected to some guy named Richard.
Told him the whole story. Said I called six months ago asking if can you refinance a home equity loan, was told no by one of their employees, believed it, then found out that was wrong. Asked why his employee would tell me something that’s not true.
Richard apologized and said that the employee was mistaken. He said they don’t refinance home equity loans at their bank but other banks do. The employee should’ve told me to check with other lenders instead of saying it’s impossible.
What I Learned About Bank Employees
Biggest lesson from this – bank employees don’t always know what they’re talking about. That lady probably wasn’t trying to mislead me. She just didn’t know the answer and made something up instead of admitting she didn’t know.
Or maybe she only knew about her bank’s policies and assumed all banks worked the same way. Either way, she gave me wrong information and I lost money because of it.
Now when I call any bank or lender, I always talk to at least two or three people to confirm answers. If something seems weird, I get a second opinion. Don’t just trust one person even if they sound confident.
Also learned that can you refinance a home equity loan is apparently a question some bank employees don’t know the answer to. Which is crazy since it’s a pretty basic question about their own products.
Rebecca Saved Me Thousands By Mentioning Hers
The answer to can you refinance a home equity loan is yes. Absolutely yes. Don’t let anyone tell you otherwise.
If Rebecca hadn’t mentioned her refinance at lunch, I’d probably still be paying 8.7%. I would’ve just believed my bank and never looked into it further. She saved me like $9,500 without even trying.
Bought her lunch the next week as a thank you. She laughed and said she was just making conversation, and didn’t realize she was helping me. But she was.
Makes me think about how much money people lose just by not knowing stuff. I didn’t know you could refinance home equity loans. My bank told me you couldn’t. I believed them. Cost me six months of extra payments plus who knows how much more if Rebecca hadn’t corrected me.
My Advice After This Experience
If you’re wondering can you refinance a home equity loan, don’t ask just your current lender. They might say no because they don’t offer it, or because they want to keep you in your current loan. Ask at least three different lenders to get the real answer.
Shop around for rates. Don’t go with the first lender you talk to. I got quotes from 6.9% to 7.4%. That’s a big difference over several years.
Don’t believe everything bank employees tell you. They’re human, they make mistakes, sometimes they just don’t know the answer. Verify important information with multiple sources.
How Things Worked Out
Been paying the refinanced rate for about seven months now. Already saved $630 compared to what I’d have paid at the old rate. Feels good knowing I’m not throwing money away anymore.
My original bank lost my business. Moved my checking and savings to the credit union down the street. Still annoyed they gave me wrong information, even if it wasn’t on purpose.
The Bottom Line
The answer to can you refinance a home equity loan is yes. Absolutely yes. Don’t let anyone tell you otherwise.
If you’ve got a home equity loan at a rate that seems high, call around and see what you can get. Even if your current lender says they don’t refinance them, other lenders will.
Don’t waste six months like I did believing wrong information. Verify answers, especially when money is involved. And talk to your co-workers about money stuff sometimes. You never know what helpful information might come up.