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I have a second home free and clear which is rented. I need to clear the money ($ 200K) another property. Is it better to refinance or get a loan if the capital costs the same? The 15 year term.

3 Thoughts on Home equity loan or refinance?
  1. Reply
    the kid
    June 13, 2013 at 5:11 am

    You aren’t financed, so you can’t REfinance. A mortgage will carry a lower rate and be more beneficial in the long run for you.

  2. Reply
    loanmasterone
    June 13, 2013 at 5:43 am

    If the property is clear and free, this would not be a refinance. It might be better to obtain a 30 year mortgage loan. This mortgage loan has more flexibility than a 15 year mortgage loan. With a 30 year mortgage loan you would have a lower monthly mortgage payment.

    You may pay off a 30 year mortgage loan as a 15 year mortgage loan. If for some reason you would nor be able to pay th e extra there is no penalty for not paying the extra.

    The interest rate might be 1/8th .125 more for a 30 year mortgage loan as oppose to a 15 year mortgage loan. Either way this is normally a tax deduction on your federal income tax.

    An equity line of credit might be the most expensive of the choices.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  3. Reply
    chatsplas
    June 13, 2013 at 6:02 am

    Most HELOCs are adjustable rate, not fixed rate
    Most HELOCs have lower fees than first mortgages
    Most HELOCs are a quicker process than a 1rst
    Most non-owner occupied properties do NOT qualify for a HELOC
    You are considering a first mtg vs. a HELOC?
    Investment property requires higher equity position and higher interedst rate than owner occupied homes

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