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I have a home with a market value of about $350,000.
$40,000 left on the mortgage at 5.625%.
$110,000 home equity line balance currently 3.35%
Thinking of doing one of two things:
1. Refinance the whole amount at current rates for 15 years.
2. Paying off the mortgage with money from the home equity line, keeping the home equity line and making big payments to pay it off in 7-10 years.
I think either way I save money over doing nothing, unless the rate on the equity loan shoots up over the next few years.
And if that happens, what if I paid off the mortgage, can I still do a refinance and get refinance rates on just money in a home equity loan, since I won't actually have a mortgage any longer?
Refi into one product and tackle it that way. The line is variable so it could change at any time. I refied to a 5/1 io arm at 2.5% look at the 5/1 or 7/1 arms or the 15 year fixed and compare the rates to see what the best rate is and plow all the extra money you can at it
I have a home with a market value of about $350,000.
$40,000 left on the mortgage at 5.625%.
$110,000 home equity line balance currently 3.35%
Thinking of doing one of two things:
1. Refinance the whole amount at current rates for 15 years.
2. Paying off the mortgage with money from the home equity line, keeping the home equity line and making big payments to pay it off in 7-10 years.
I think either way I save money over doing nothing, unless the rate on the equity loan shoots up over the next few years.
And if that happens, what if I paid off the mortgage, can I still do a refinance and get refinance rates on just money in a home equity loan, since I won't actually have a mortgage any longer?
I don't know many companies that are willing to give you a mortgage for $40k. They realize you're going to be paying them off soon and the interest they make may not be worth it compared to their processing fee.
$40k isn't that huge of a mortgage debt either way. Assuming you've been paying this off for a while, you can probably afford a pretty decent extra payment once you do either of the above.
Personally, I'd put it on the HELOC and pay the mortgage at the current rate. Shorten the time and forget the interest rate.
I don't know many companies that are willing to give you a mortgage for $40k. They realize you're going to be paying them off soon and the interest they make may not be worth it compared to their processing fee.
$40k isn't that huge of a mortgage debt either way. Assuming you've been paying this off for a while, you can probably afford a pretty decent extra payment once you do either of the above.
Personally, I'd put it on the HELOC and pay the mortgage at the current rate. Shorten the time and forget the interest rate.
It would be a 150k mortgage if he refis to a single mortgage
What are your monthly payment for the current 2 loans. I would definitely look into doing a 15yrs single mortgage. It was about 3% the last time I checked about a month ago. As long as there isn't an outrages up front out of pocket refi and you can afford the payment, I would go that route.
Take a look at PenFed. Anyone can join PenFed, and they have excellent terms on their mortgage products. They offer a no cost refi, but if you pay off in the first 3 years you will have to reimburse them some of the closing costs.
I have a home with a market value of about $350,000.
$40,000 left on the mortgage at 5.625%.
$110,000 home equity line balance currently 3.35%
Thinking of doing one of two things:
1. Refinance the whole amount at current rates for 15 years.
2. Paying off the mortgage with money from the home equity line, keeping the home equity line and making big payments to pay it off in 7-10 years.
I think either way I save money over doing nothing, unless the rate on the equity loan shoots up over the next few years.
And if that happens, what if I paid off the mortgage, can I still do a refinance and get refinance rates on just money in a home equity loan, since I won't actually have a mortgage any longer?
Yes, but if your HELOC rate has increased, the available HEL rates at that time will be higher as well.
Penfed has very competitive rates. The only issue with any new mortgage is the upfront fees along with title insurance cost. They are not free.
Of course they're not free, but the lender has the option to pay them for you.
But my point is moot; I just looked at PenFed's site and the offer seems to be gone. That's a shame. This particular mortgage was all the rage on the Boglehead's Index Forum.
It would be a 150k mortgage if he refis to a single mortgage
I read that wrong. I thought he was saying he had a line of credit of $110k that he was planning to use.
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