Lose the Line, Get Fixed

In the past two years, home equity lines have gone from being something that gave homeowners access to money at rates lower than both fixed-rate home equity loans and first mortgages to a rock around the wearer's neck. I know that sounds a bit overboard, but what should you say when the Federal Reserve Board raises short-term rates something like 16 times since mid-2004, raising the prime rate from 4 percent to 8 percent. Ouch? Townonline.com reports:

If you have a home equity line of credit that you want to get out from under you have three basic options: 1) keep the credit line; 2) pay it off and replace it with a fixed-rate home equity loan, or 3) do a cash-out refinance on your first mortgage and pay off the credit line with the proceeds.

Read more:Best to get rid of credit line and get fixed-rate loan