Home Refinance Options,can anyone give me some advice?
We own a home together, with a 1st and 2nd
mortgage. I have no readily available "cash options" for closing
costs, or other payments. So, as part of the settlement, I have to
pull an additional $42,000+ out of the equity during refinancing,
which will cause any lons to put me close to a 95% LTV ratio. Out of 5
lenders I've contacted thus far, only 2 have come up with any plan to
make this happen for me.
So here's my question...which of these options is better (assuming I
have no intention of selling the home within the next 10 years, and
assuming all closing costs are equal)
#1) 1st Mortgage for 57% value (covers existing 1st only), 30 year
fixed at 6.25%
HELOC for 38% value, 15 year variable at 5.75%
or
#2) 1st Mortgage for 80% value (covers existing 1st and 2nd), 30 year
fixed at 6.50%
HELOC for 15% value, 15 year variable at 7.75%
I like the idea of having more money in the 1st, at a fixed rate, with
a longer term, but can't figure out if the difference in interest
rates makes it a bad choice.
-A lot of this is going to depend on how quickly you pay down the
home equity line of credit, since that's the main exposure on option
1 (that the rate on it rises dramatically with a large balance on
it). As well, what are the rules involved with