Should I refinance my first mortgage with a HELOC?
by Mortgage Rates on Friday, October 1st, 2010 | 5 Comments
-
Mortgage Info
-
Updates
-
Useful Links
-
-
Tags
2010 About article Auctions bank banks best Business buyers change Credit Debt Equity Financial First fixed Foreclosure From good Government Help Home house Housing interest Loan Loans Market more Mortgage Mortgages Need News options qualify Rate Rates refi refinance Refinancing should this Time variable would-
Meta
Yes, you’re missing something. He’s taking you for a ride.
“15 years of interst only”. That means that if you try to sell the house sometime within the next 15 years, you won’t get anything from the sale. It’s the same kind of nonsence that drove the economy into recession in the first place.
And if you’re in the “almost 1%” savings range, don’t do it.
You never save any money unless you save two full points.
FYi, the second segment of 15 years (years 16-30) will be substantially higher– it would work out ot what a 15 year mortgage would be… keep that in mind.
AND READ THE FINE PRINT NO MATTER WHAT THE BROKER SAYS WILL HAPPEN.
wait you are going to pay off your first mortgage for a line of credit??? why would u do that.. its still a tax write off either way.. unless you are strapped for money i wouldnt do it…
and i think most, if not all HELOC are variable rates.. so your payment changes every month.. and you are not paying any principal..
and is it the worht all the fees to get that lower rate?? probably not because you wont recoup that $ for years and years
This makes no sense. Toss that guy out on his ear.
They are calld first-position HELOC’s and First-position HELOC’s are NOT fixed rates….EVER!
I have never seen one in my career….they are all adjustable based on prime plus whatever percentage dictated by the note and almost always fluctuate MONTHLY..
That is a negative ammortization loan and if you sell before year 15, you are going to be in trouble with the payoff.
HUGE mistake!!!
Someone isn’t explaining to you the program correctly.
PS: Amanda isn’t taking into consideration of the COSTS of the refinance, because I guarantee she doesn’t work for free. On average, if you are only dropping 1%, it takes usually 2 1/2 to 3 years to recover the costs of a refinance (TOTAL cost of refinance/dollar amount of monthly savings=.number of months to reach the “break even” point)…and that is assuming the overall loan deal is to your benefit.
You can also NEVER guarantee that the market will go up….as people in California have learned the hard way…that is a horrible selling point to an interest-only loan.
Nice sales pitch though!