I have a mortgage for $50,000.
I have to refinance by next Aug.
I also need to put a basement under my house hopefully within 3 years, that will be to the tune of $30,000.
We are starting to save vigorously for the remodel. But realistically we probably won't be able to come up with more than $10,000 in 3 years, if that.
That leaves a gap of $20,000.
I'm not sure what the best way to come up with that much money in 3 years is. Here are my options...
1 When we refinance next year add $20,000 to the loan, and hold onto the extra cash until we finish saving the rest. Making it a 30 year loan with 3% interest.
2 Refinance only our current mortgage, for a 15 year loan at 2.5% interest. Then in 3 years get a HEL for the remaining $20,000 at 6-8%.
I'm not sure which is a better choice.
Option 1, the money would have lower interest. But we'd be paying on it for 30 years. And I hate the thought of paying interest on $20,000 for 3 years that we aren't even using.
Option 2, the interest for the HEL would be more than double. But we could make extra payments on it, and pay it off as fast as possible. Plus our mortgage would be paid off after 15 years at max.
Which will save the most money in the long run?
I have to refinance by next Aug.
I also need to put a basement under my house hopefully within 3 years, that will be to the tune of $30,000.
We are starting to save vigorously for the remodel. But realistically we probably won't be able to come up with more than $10,000 in 3 years, if that.
That leaves a gap of $20,000.
I'm not sure what the best way to come up with that much money in 3 years is. Here are my options...
1 When we refinance next year add $20,000 to the loan, and hold onto the extra cash until we finish saving the rest. Making it a 30 year loan with 3% interest.
2 Refinance only our current mortgage, for a 15 year loan at 2.5% interest. Then in 3 years get a HEL for the remaining $20,000 at 6-8%.
I'm not sure which is a better choice.
Option 1, the money would have lower interest. But we'd be paying on it for 30 years. And I hate the thought of paying interest on $20,000 for 3 years that we aren't even using.
Option 2, the interest for the HEL would be more than double. But we could make extra payments on it, and pay it off as fast as possible. Plus our mortgage would be paid off after 15 years at max.
Which will save the most money in the long run?
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