Hi MoAtWork, You have a car with only one forward speed, I assume - if you are so slow? I sometimes use fully secured line of credit using equity investments as collateral. I don't worry about paying on principal that much and the bank doesn't worry if I don't. As I use the funds generated to buy more investments, making the interest deductible, that is a help. I can make payments on pricipal at any time and in whatever amount that I choose. Which I do, as it suits me and have money on hand. For people who, having used such a loan at lower interest rate to reduce interest rate on auto or credit card debts, might be tempted to go out and rack up new credit card debt in significant amounts, refinancing to pay off the current credit card (read "debt" card) debt is usually a poor idea. Just gets you deeper into debt - and now you're paying on those newly created credit cards' debts at much higher interest rates, again. Many borrow to buy a car but pay cash for investment programs. Up here in Canada I call that an unwise move. If I borrow to buy a car, unless I use it for business (not including driving back and forth to my regular place of employment) the interest is not deductible. If I pay cash for the car and borrow to invest, that makes the amount of interest paid deductible. I've suggested to some clients on occasion that they liquidate their investments, use the proceeds to pay off their car loan, then borrow again to buy back the investments. I figure that deductible interest beats non-deductible interest (at the same, or even comparable rates) every time. I bought a 1990 Dodge Colt, 1.5 litre engine, standard tranny, in summer 1997, with 138,000 km. (something over 85,000 mi.) on it, paying about $2,700. I've had to put some repairs on it in the more than 6 years that I've owned it - not an inordinate amount, in my opinion. During a recent trip from London, Ontario to Edmonton, Alberta via Regina, Saskatchewan, we doubled that amount of mileage on the odometer. It has something over 282,000 km. on it now (over 175,000 mi.) During the trip, it sat outside overnight (no block heater) when temperature in the early morning was -39 degrees (considering wind chill, something like -50 degrees). Thick oil meant that it turned over very slowly in the morning - but it fired in about 5 seconds. Oil light stayed on, so I shut it down after about 5 seconds. Let it sit for about 10 seconds, started it again, ran it for about 6 seconds, oil light still on, so shut it down again. After about four such starts, engine was turning over about usual speed while starting. Started over a dozen times before the oil light went out. It's a fuel-injected gas engine - which I thinks helps the starting in extreme cold like that. When I ask new car salespeople if they can get me about 40,000 miles for about $4,000. - 5,000. - they tell me to get lost. Driving the 5,000 mile or so with a leaky gas tank that could be filled only slightly under half full, my son complained about buying gas about 50 times. I told him that if that was the most major problem that he had - he was laughing, for he had very little to worry about. I'd bought a rusty tank for $75. here, but didn't want to install it, as it was so rusty. Garage man said some recyclers bring them in from AB or AZ (dry climate) for something like $110., he thought - but on investigation it turned out to be over $300. So, while I was in Alberta, I bought a tank for $50. and hauled it in the back seat for about 2,200 miles. Took the car to the garage to have the tank installed, this afternoon. Recently received an offer from Citibank to lend me up to $3,500. (possibly more). When I called to ask them what rate of interest they'd charge, the respondent said it depended on the amount that I borrow, but the full $3,500. would cost me ... 26% per year. I told her that I just received a report from my bank on my fully secured line of credit, which is unused at the moment - at offered rate of 4.5%. So I thought that I'd not be taking them up on their offer, any time soon. Ain't life fun? Especially when one's retired, with three or four pensions and enjoying good health. Nice not to have to go out and scrape ice off of the windshield in the dark before going to work. When I bought med insurance for travel through U.S., cost was $28. as I had no pre-existing medical conditions - would have been $52. had I had some. Enjoy your winter, all. ole joyful

It is really hard to decide; my rule of thumb has always been, which will require the least out of my pocket in the long run? Without doing all kinds of calculations (that I can't do, but I believe that there are websites that can calculate it for you) I can't say for sure. There are advantages to the fixed rate refi, especially lowering the interest rate on your original balance; but could you get a lower rate and less out of pocket from a HELOC, paying it off first with the same discipline that you have been using? Have you talked to a credit union? I did take out a HELOC from my local credit union in order to pay off my mom's condo loan; there were no closing costs, fees, etc and the lowest interest rate in town. That was before the crash -- and it was long ago paid off, so I don't know if such a good deal might still be available. Don't know what repairs you need, but some large companies (hvac, roofing, siding) will offer low cost financing too -- you have to read the contract very carefully to be sure that you are getting what was promised.

Lots of us just changed to 80% for second homes because the Mortgage Insurance companies changed their guidelines. If I remember correctly, out of 4 insurance companies, there is only 1 left that will insure a second home. And all the mortgage insurance companies are making major changes right now. Fannie Mae is changing to allow people to own more than 4 properties, which was the maximum. But there are many more restrictions.

I think people will buy vacation homes regardless of the MIL deduction... I think if they do away with a mortgage interest deduction, it will mostly affect the way people think about becoming homeowners for a first time, and not those looking for vacation homes.