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GraceH · Mar 19, 2007, 10:09 AM

We have a HELOC with a balance of 83000 at 8.25 int. rate. We are wondering if it would be a good idea to withraw 100k to pay down the HELOC. We are in 15 tax bracket.

Thanks

ballengerb1 · Mar 19, 2007, 10:40 AM

How much have you been earning on the $100,000 where it is right now? 8.25 is high for a HELOC and you can go out and get a better rate. You could also go with a conventional mortgage using your home if you own.

GraceH · Mar 19, 2007, 11:36 AM

Thanks for the quick response. We own a home balance is $321000 at 5.625%. Payments are $1920/mo. It seems the 100k is not appreciating that much. I have contacted a mortgage co. and the rate for the new refi wold be 6.375, 10 year interest only, payment would be $2422. We are simplifying our lives and want to save better. If I pay down the HELOC and eliminate the $575 interst only payment, we could put the money into a new 401k. We are 48 and 51 years of age. Income is 90k /year, 15 tax bracket. Thanks again.

starwarsgal · Mar 28, 2007, 03:17 PM

I would not touch the 401K.
My suggestion to you would be to refinance and payoff the Heloc,
Refinance (no cash out) but instead use any equity in the home to payoff the home equity line of credit.
Rates have gone up :(
The rate of 5.625 you have at the moment is wonderful.
Please be careful when contacting mortgage companies. I have been in the business for years, watch out for 'rebates' -
If you qualifed for a rate as low as 5.625 before, perhaps the mortgage company is making money in the back by charging you 'points' and that is why they are offering you 6.375 this time around.
If you have good credit, be very selective!
My husband and I do loans for family and friends, we are licensed and have been in the business for years, proceed with caution and do not trust loan officers!
Hope this helps.
If you need any assistance with a refinance feel free to reach out!
Good luck