Quote:
Originally Posted by alpinegroove
I am trying to help my mother make some financial decisions.
She currently owes about 150k on her mortgage and 50k additionally on her variable rate HELOC. The property is valued at about 500k.
She is nearing retirement, and does not have any savings.
She plans to rely on social security and income from her business.
What is the best thing to do with the loans?
Combine the mortgage and HELOC to be included in one monthly payment?
Convert the HELOC to a fixed-rate loan?
Is this a good time to be doing this in terms of rates?
Both the mortgage and the HELOC are from WAMU. I suspect that there are better products out there. Any suggestions?
Thanks
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The real question in my mind.... "she plans to rely on SS and income from her business" --- are these sustainable? What's her cash-flow situation?
Assuming nothing else changes, can she meet expenses and survive with these two pieces of income? Without savings, she might not be able to. Especially if the ARM adjusts upward.
Other things to consider:
1) Income from her business is probably variable as well... she probably makes more some months and less others.
2) She bought her condo in 1999; she may lose some equity since California house values are still going down (and may be for a long while).
3) What's her health like? Does she plan to work until she cannot? Do you know the ages of her blood relatives upon death? What happens if she HAS to stop working?
4) Don't ignore the costs of changing these loans.