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Mortgage Question

S

SpongeBob

Platinum Member
Ok, so I currently have a HELOC for about $30K with a variable rate. Due to prime increasing, my monthly minimum on it has done nothing but increased. I'm interested in refinancing with a fixed rate. I went to my lender today and was offered ~9.0% on a fixed rate principal + interest loan, bringing my monthly payment to $260, which is about $40 more than my last minimum interest only payment on the HELOC.

Is it worth it to refinance? Will prime keep going up in the near future or am I being too conservative in wanting to lock in a rate?
 
Originally posted by: MercenaryForHire
Need to refinance that pineapple under the sea already? 😛

- M4H
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Exactly, the Easter Island heads and Rocks in my area are driving housing prices up!
 
Originally posted by: dman
Refi, but look around for better rate than 9%.
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Well he said 9% was worst case since I wasn't ready to make a decision today. Today he could get me 8 5/8ths. If I decide to do it I'll make a whole bunch of calls and go with the lowest.
 
Originally posted by: dullard
My best guess is that the feds will raise interest rates two more times in 2006. So expect another half a percent increase from today. No one knows for sure what will happen. But that is probably not too far off from the truth.

Feds are nearly done with increases.
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Thanks dullard. If that's true then I'm definitely in a better position not refinancing. Aghh, I hate these decisions!
 
You're comparing apples-and-oranges. The HELOC has an interest-only payment, the fixed a P&I payment. You need to take into account the maturity date on the HELOC (when it will be due in full even if you only ever make interest-only payments), the term on the fixed loan, and the total pay of each.

As to future rate increases: Text
 
Originally posted by: Vic
You're comparing apples-and-oranges. The HELOC has an interest-only payment, the fixed a P&I payment. You need to take into account the maturity date on the HELOC (when it will be due in full even if you only ever make interest-only payments), the term on the fixed loan, and the total pay of each.

As to future rate increases: Text
Click to expand...


That's true, with the fixed I am paying some principal so it is a bit different and leans in favor of the fixed loan. With regards to the term though does it matter because I plan on selling this house in 2-3 years?
 
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