U.S. CitiesCity-Data Forum Index
Happy Easter!
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 02-23-2010, 05:41 PM
 
2 posts, read 4,572 times
Reputation: 14

Advertisements

I have a VA loan at 7.5% (we were planning on moving so didn't refi). I have an interest only HELOC at B of America for 85k at prime rate. I owe just under 65k on mortgage, and since I can't seem to find anyone to refi such a small amount, I wondered if I could pay it off using my HELOC. My current payment including T and I is 850 a month. I would pay 1250 a month on the HELOC. Hoping that the prime wouldn't get above 7.5 in the 7 years it would take to pay the loan off.

Can this be done?

My concern is that when you pay off your mortgage, the bank that gave you a HELOC would want their money first.
Quick reply to this message

 
Old 02-23-2010, 05:55 PM
 
28,383 posts, read 67,903,744 times
Reputation: 18188
This has been asked before.

The simple answer is this is perfectly acceptable, and for some folks a smart move. Without knowing the details on why you might want to trade an $850/ mo payment for one that is about 25% higher (but I would presume much faster pay off) I would urge you to run the numbers to be sure that you are not sinking money into something that might now pay off.

The HELOC is, right now, a second mortgage and as such is subordinate to the first -- they cannot force you to pay them back before your decide what you do with the first. They would gain some legal right by you paying off the first and they'd then become the defacto first position lien holder if you defaulted. Some HELOCs have goofy clauses in them regarding the quality of the collateral, but that is generally understood to be an attempt to prevent from you doing some crazy renovation that makes you house less valuable, and it would take some creative lawyering to get anyone to believe you are trying to do anything other than save yourself some long term dough. Right???
Quick reply to this message
 
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:
Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top