Yes. You can refinance a home mortgage with a home equity loan instead of getting another new first mortgage. Advantages include low cost (the application fee for home equity loans is often much less than for mortgages) and tax deductibility of interest on loans less than $100,000. A disadvantage may be that your lender will not want to escrow your taxes and property insurance. In this case, you'll need to save up for these payments yourself by setting aside 1/12 of the annual payment each month. Be sure to get a fixed-rate home equity loan so there are no surprises (read: higher payments) in the future.

Prior to using this alternative, however, you should consider first talking to your lender to try to renegotiate your present loan to the terms you are seeking in the home equity loan.

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