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Last edited by Jokerpersona on Jun 16th, 2022 7:06 pm, edited 1 time in total.
Apr 11th, 2022 7:32 pm
Apr 11th, 2022 8:51 pm
Apr 11th, 2022 9:10 pm
Apr 11th, 2022 9:50 pm
Except "it" won't be paid of. It will be either a conventional mortgage or a HELOC (which IS a mortgage by another name). HELOC with a balance is still payments and rates.
Apr 12th, 2022 7:41 am
Apr 12th, 2022 8:06 am
Apr 12th, 2022 8:44 am
Great points by skeet50. I would add:skeet50 wrote: ↑ HELOCs offer the flexibility in that you can borrow the amount you need when you need it. HELOCs are fully open so you can pay off as much as you can without any restrictions. HELOCs though generally come with a higher interest rate than a mortgage and HELOCs are generally compounded monthly instead of semi-annually like a mortgage.
A mortgage has great flexibility also. You can shorten the amortization to pay it off quickly. Most mortgages come with great pre-payment options that allow you to pay off the mortgage more quickly. One option if your ability to make extra payment exceeds your mortgage's pre-payment options is to select a mortgage with a 1 year term as you can pay more money when the term expires.
Apr 12th, 2022 9:20 am
We had similar situation. Mortgage was up for renewal and had $67k on it left. Decided to get a HELOC and pay off the mortgage so we only had HELOC debt. Than paid that off when we felt like it since we also was borrowing from HELOC for investing purposes.Jokerpersona wrote: ↑ We're moving into a basically paid off home in a few months, new construction. There's roughly $40k to get to mortgage free between our sold house gain and new house price.
Since it's new construction, there's a ton of things we'll need and want to do straight away (blinds, washer dryer, fence etc.), lots and lots and looking at probably 50-100k total, most likely closer to 50k.
So, looking at options, is it better to do a mortgage or HELOC in this situation? Or are we locked into a mortgage only option since the house isn't fully paid off so we'd need a mortgage anyway for the $40k?
In either event, it would be probably either $100k or $150k mortgage or HELOC needed. What's better in this situation? Plan is to pay it off quickly and aggressively, income no problem and are approved for much, much higher.
Apr 12th, 2022 11:22 am
Yeah you have many options but none of them are obviously better than the others. Personally this is what I would do but I don't think you be necessarily making a mistake doing something else.Jokerpersona wrote: ↑ I was about to reply saying that's essentially the same as what I'm proposing, but it actually isn't, and it's a good point. Appreciate that.
Good responses from everyone, thank you.
Leaning towards your advice above, and maybe adding the re-advanceable mortage into it. $140,000 mortgage + largest HELOC to start with, keeping $100,000 from the house sale in cash.
Use the cash money to pay for the things we want to do, still have the mortgage, and the HELOC, and the HELOC will grow as we pay down the mortgage.
It's a tough decision either way, sounds like there isn't inherently a right answer here.
Apr 12th, 2022 2:00 pm
Apr 12th, 2022 2:42 pm