At a closing I had with real estate attorney Chuck Thibaut of Northen Blue Law Firm in Chapel Hill NC, it was suggested that my client might want to consider refinancing his equity line of credit after a few months. Apparently the interest rate on equity lines when used to partially finance a purchase of a home are higher than for equity lines secured on a property after someone has owned the home for a while.
The reason behind that seems to be that equity lines of credit on purchases may be riskier for the investor since there is no established payment history . But once that payment history has been established and it is positive, banks may be more willing to give more competitive rates. Rates for equity lines can even be less than prime in some cases with a good credit history. So, if you bought a home a while ago and still have your original equity line, it might be worth shopping your interest rate with lenders for a more competitive rate!