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I currently have a mortgage with a rate of 5.25. I also have a HELOC loan of $40,000 at an interest rate of 5.74. (I have the ability to pay off the HELOC loan.) My bank just advised the rates were 4.125 (OMG) on Friday. It appears that I may be able to do a cash out of $66,000 for a 20 year period.(I would probably net about 59,000 after fees.) It would increase the life of the loan by three years. It seems like a no brainer but it would increase the total loan by $28,000. However, my monthly rate would be reduced by $38.38.
Why not do the refi (assuming the bank isn't charging tons of fees and points, which I suspect they are), pay off the HELOC (don't close it) don't do the cash out, and pay off the mortgage quickly?
A paid off house is a wondeful thing. Especially these days. Why do people insist on borrowing money just because they can?
I need the money for future endeavors. I am monitoring the interest rate to see if it goes down further. It is already down to 5.24.
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