Need financial adviceJuly 24 2012 at 11:58 AM
|Christine (Login stina716)|
The Frugalista Files
As our house falls apart around us, we have decided to hock it again.
our current Home Equity Loan is at 8.99%. (we actually found out today it's NOT a home equity loan - it's a personal loan with the house as collateral!)
Hubby applied for a home equity line of Credit - to take out enough to cover the existing Home Equity Loan and 10K to fix the house would increase our monthly house payments by about $30.
the interest rate offer is thus:
option A - Lock in at 4.24% now for the life of repayment (this correlates to the payment amount above)
Option B - take 2.49% for up to a year then lock in at prevailing fed rate plus 1% (we have the option to lock in at prevailing rate plus 1% at any time during that year.
So which do we go with??
Term - 5 years for the balance of the current home equity loan (aka the remaining term of the original loan). 15 years for the extra 10K. no penalty for early re-payment unless it's in the 1st three years. no closing costs (only cost to us would be if the appraisal costs more than $300 we pay the difference bt cost and $300 - which the bank says they use pretty cut rate appraisers and almost never go over!)
All of this is of course predicated on qualifying for the loan.
If all we took out was the balance of the original loan - we'd lower our monthly payments by $50. Too bad the porch is falling off the house (and we may have termites) and the roof still hasn't been fixed. a prayer or two that we can manage to get approved would be good too.
- We live for this stuff! - Maxine on Jul 24, 2012, 2:04 PM
- make a list of everything that needs to be done to the house - patsy on Jul 25, 2012, 7:02 AM
- Devil's advocate here - Maxine on Jul 25, 2012, 8:17 AM
- I am hesitant to give advice of any kind - let alone financial advice... - Kim on Jul 25, 2012, 11:04 AM
- Do you have a mortgage? - LisaCNC on Jul 25, 2012, 11:25 AM