Unlock HELOC?

[lifeisgood]

Hi all,

Thanks in advance for your help. This site is fabulous. What do the experts think? I locked the drawn down portion of my HELOC ($25,000) some time ago at 7.75%. It is called the fixed rate loan option through BofA. This month, I looked into refinancing this into a home equity loan, but the rate is about the same, maybe 7.9%. The manager said I could unlock this fixed rate loan option amount back to a variable rate, currently 4.75%. Should I do this? While I have this loan earmarked for early repayment in my long term plan, I could not currently pay this off anytime soon if the interest rates went up. I'm currently stashing cash for 5 months living expenses, then private student loans, then $$ for a car. The HELOC would be the last debt to pay off other than the mortgage. Thanks for any input.

[maat55]

Hi all,

Thanks in advance for your help. This site is fabulous. What do the experts think? I locked the drawn down portion of my HELOC ($25,000) some time ago at 7.75%. It is called the fixed rate loan option through BofA. This month, I looked into refinancing this into a home equity loan, but the rate is about the same, maybe 7.9%. The manager said I could unlock this fixed rate loan option amount back to a variable rate, currently 4.75%. Should I do this? While I have this loan earmarked for early repayment in my long term plan, I could not currently pay this off anytime soon if the interest rates went up. I'm currently stashing cash for 5 months living expenses, then private student loans, then $$ for a car. The HELOC would be the last debt to pay off other than the mortgage. Thanks for any input.

Last time I tried to play the rates game, I lost. If it were me, I would lock in. At the same time, I would not have taken out the loan in the first place.

Looking at what you have planned for it, I would pay the loan off and save for these expenses. Save a small EF, buy a cheap car and make your payment, as is, on the SL.

[Joebanker]

I would shop around for a lender that offers fixed rates lower than what you are paying now and refinance. Pay attention because you may find a lower rate but when add in all the closing costs, the amount you pay could actually be higher than the fixed rate you're paying now.