L. L asked:
The equity loan has a 10 year payoff limit but can normally be extended and our mortgage is for 30 years. I was just thinking how much money we could save in interest if we do it this way but let’s face it, interest rates could go up on the equity. It’s fixed at 1% below prime.
Unsecured Loans
The equity loan has a 10 year payoff limit but can normally be extended and our mortgage is for 30 years. I was just thinking how much money we could save in interest if we do it this way but let’s face it, interest rates could go up on the equity. It’s fixed at 1% below prime.
Unsecured Loans
Tags: Equity Line Of Credit, How Much Money, Interest Rates
4 responses to I can pay off my existing mortgage which is 6.5% interest using our home equity line of credit at 4% int?
Consolidating Debts
You can’t be serious. You answered your own question. The equity is 10 yrs. Now what, you ready then to pay 10 or 15.. You assume it can be renewed but at what rate, In 1981 the mortage rate was 18%. your plan is no different then an adjustable. Stop over thinking and leave your current mortgage alone.
I can pay off my existing mortgage which is 6.5% interest using our home equity line of credit at 4% int?
Unsecured Loans
If your plan is to pay as little interest as possible, then the “home equity loan” is not the answer. I’ll tell what you can do to lower your interest – and save years off your mortgage. Its legal and you can do this very easily. Just write an extra check each month – you decide how much you can afford – make it payable to your mortgage company include your Loan # on note and write this over your signature: Apply to Principal Only!
that means they cannot use it to pay interest. If they cash it, and don’t send it back, they have to take that amount off your mortgage balance. I sent 200 extra each month, and saved 7 years off my mortgage.
I can pay off my existing mortgage which is 6.5% interest using our home equity line of credit at 4% int?
Click here for Retail Heaven!
There’s a lot of factors you need to consider here. As you point out, the interest rate on your equity line could rise — perhaps higher than the 6.5% rate on your mortgage. Also if you were to make this move, given than equity lines typically only require a minimum payment it might take considerable discipline on your part to make sure you pay it down on a reasonable schedule. And there is also the issue of tapping our your equity line. You might need it as some point for an unexpected expenditure — such as a repair on the house. An alternative approach to consider might be to make prepayments on your mortgage while waiting for an opportunity to refinance at a lower rate — and ideally a shorter term like 15 or 20 years.
I can pay off my existing mortgage which is 6.5% interest using our home equity line of credit at 4% int?
Click here for Retail Heaven!
Leave well enough alone. If you have an open end which means you can pay down the mortgage anytime without being penalized.. Just request an amortization from your bank. That will give you a complete break down between interest/principal.
I can pay off my existing mortgage which is 6.5% interest using our home equity line of credit at 4% int?
Leave a reply to I can pay off my existing mortgage which is 6.5% interest using our home equity line of credit at 4% int?