Selling and living with a HELOC

kate724April 27, 2009

Long story short, my house had a conventional mortage at 7.25% with $80,000 left. We had a heloc attached which we never used - until this year. The heloc was $200,000. We decided, because of low interest rates, to pay off the $80,000 mortgage and use the remainder of the heloc to do much needed repairs to our house to sell it.

The interest on the heloc is 4% for the first $50,000 and 3.4% for the rest. We have used $180,000. We will list the house in 2 weeks.

Should we continue to gamble on the heloc staying at these rates? Is there a safer way to finance this amount without having to pay points on a fixed? I hope the house sells fast, but it seems houses are just sitting and people are not buying. I don't know how long it will take and this is making me nervous. House was bank appraised 6 months ago for high 9's.

I would appreciate any advice,

Kate

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kate724

Sorry, posted on the wrong forum.

    Bookmark   April 27, 2009 at 11:42PM
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dave_donhoff

Hi Kate,
Short-term rates aren't going anywhere soon.... you *ought* to be fairly safe in standing tight while marketing and selling your home without the expense of a refinance.

Besides... if you *DID* decide to refi, you'll HAVE to do so BEFORE you list to sell. Once its listed, kiss your chances of getting approved for anything w/o a serious prepayment penalty* goodbye.

(*exception being a small handful of states that prohibit offering prepayment penalties... in which case, the lenders that will allow a refi after a recent listing will either charge much higher rates, or not approve your loan at all.)

BOTTOM LINE; I expect you'll be OK.

Dave Donhoff
Leverage Planner

    Bookmark   April 28, 2009 at 3:18PM
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