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  • #1

    What to do.

    I originally purchased my house at %100 80/20 2 yr arm P/I, bad credit. Mistake one (lesson learned)

    I have a chance to Refi my house at a good rate for a 80/20 now excellent credit. My arm expired on the original 80 but it only jumps 75 dollars for the next 6 months. The Home equity loan is fixed for 30.

    (mistake 2 lesson learned)
    I made another foolish mistake early on and took out a home equity loan and increased my mortgage by $24,000 (paid of other debt, but hine site it was DUMB).

    If I refi I will lock in a lower rate at 30yr fixed, but I will add an additional 10 grand to an already extended mortgage (closing costs) with make believe money. Increasing my stupidity to a $35000 dollars.

    I can if I put all my might into my mortgage pay off the 25 grand within eight months (ill be cash poor) but atleast relieving myself of a huge burden and increasing my equity position (baring the economy). Basically starting back a zero (the first dumb mistake) and decide what direction to go then.

    I feel like this is the harder road, but the bette one. What do you guys think?

    The home equity loan is the highest rate. no other debt beside the house.

    Thanks guys.
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  • #2
    Re: What to do.

    I haven't got a clue how to respond to your questions, but I thought I'd bump this thread up as nobody has responded yet.

    ~ Jenney

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    • #3
      Re: What to do.

      I am certainly no expert cause I have not had a home mortgage in about 30 years, but i would certainly choose a fixed rate over an arm. I would work like crazy and pay off as much principal as i could early on!

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      • #4
        Re: What to do.

        If you can pay off the loan in 8 months, why not? Or, if you don't have an emergency fund, pay the loan off in 12 months and build up your emergency fund at the same time.

        If you're this close to paying it off and don't want the loan anymore, it doesn't seem like it would make much sense to refinance, especially with those hefty closing costs.

        But that's just me. Seek your own professional advice.

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        • #5
          Re: What to do.

          Originally posted by mbhunter
          If you can pay off the loan in 8 months, why not? Or, if you don't have an emergency fund, pay the loan off in 12 months and build up your emergency fund at the same time.

          If you're this close to paying it off and don't want the loan anymore, it doesn't seem like it would make much sense to refinance, especially with those hefty closing costs.

          But that's just me. Seek your own professional advice.
          Yes that is what I am thinking, I am leaning very much to your opinion

          Comment

          • #6
            Re: What to do.

            I am not certain as to what to do either....

            Equity loan/2nd mortgages was about the only "dumb move" my ex and I did NOT make.

            I too am of the personal opinion to pay that off ASAP, but I admit, I'm like that towards any kind of debt so....

            As for the ARM, let me read those tea leaves boiled in ancient tortoise shell, cradled between my weather-predicting knees. Hmm. Well, interest rates in general are unlikely to shoot up anytime soon. Very likely the opposite in fact.... So, it would be kind of a shame to lock it in right now... if you're chasing rates. On the other hand, I think it's a good idea to lock it in sooner rather than later, if only because I like to stabilize my debts, and that's that what I would do anyways....

            Kind of a tough spot, I'll say that much.

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