Are my HELOC and solar payments actually reducing what I owe?

A real example from my desk

A homeowner in Paulden, Arizona contacted me wanting a lower monthly payment. Their combined monthly obligations were approximately $4,358 across a first mortgage, an interest-only HELOC and solar panel payments.

We consolidated everything into a single FHA mortgage. The new FHA loan used cash-out equity up to 80% of the home's value, the credit score requirement for their program was a minimum 660 FICO, and because it was an amortizing mortgage, every payment reduced what they owed instead of just covering interest. Their monthly payment dropped by several hundred dollars — and the loan actually pays itself down.

Three questions to ask about your current loans

• Am I in an interest-only period on my HELOC?
• Is my solar loan or lease balance shrinking each month, or just collecting interest?
• If I sold my home today, would the payoff numbers surprise me?

What a refinance can and cannot do

Consolidating an interest-only HELOC or solar financing into one amortizing mortgage can simplify payments and start reducing principal — but it moves that debt into a loan secured by your home, and loan-to-value limits, credit requirements and program guidelines all apply. Every situation is different, so it's worth reviewing the full picture before deciding.