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Old 11-29-2009, 03:48 PM
 
58 posts, read 446,250 times
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We purchased our house with 10% down and financed an additional 10% with a 2nd mortgage to avoid PMI. The rate we got on the 2nd mortgage wasn't terrible, it's 7% for 15 years.

We haven't researched other banks yet and only checked with our primary mortgage lender, which allows HELOC up to 90% of the FMV, and the HELOC has lower rates at least for a few years, which is all we need to pay the 10% off (we never intended to carry it for 15 years).

Are there any financial downside to this plan that I am not seeing? If I take out the HELOC with the same bank (one that holds both our primary and 2nd mortgages), they are really loaning us money so that they will end up making less interest off us, tough deal for them.
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Old 11-30-2009, 04:48 AM
 
Location: Wake Forest, NC
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The only financial downside is the HELOC is a monthly adjustable rather than a fixed rate- as long as you are fully aware of and accept this risk then you should be OK.
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Old 11-30-2009, 12:08 PM
 
Location: Plano, Texas
1,676 posts, read 6,333,376 times
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And the rate should remain very low for at least a couple years.
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