Question

Hi all!  I'm looking for some advice.Hi all! I'm looking for some advice. My husband and I need some work done on our house so we are looking at the home equity line of credit. I was emailing our loan officer and she also suggested looking in to refinancing our house. We are currently at 4% and she said there's a chance we could get 3% - saving maybe $100 a month on our payment. She gave me an estimate, without running our credit, and the payment could go down $161 a month. We would still have to do the HELOC though for the work needing done. Is it worth paying $2, 000 to refinance to save the $161 a month then still have to get another loan for work? If we get the HELOC we have to pay $600 to close on it. That is why we also considered just a personal loan, but she just mentioned that the personal loan would probably have a higher rate. Help! I don't know anything :( . We have had our home for 4. 5 years. We are needing to replace windows, siding, and our roof.  

Answer 1

If you have a 25 year mortgage and save $161 a month, this is your total savings. I would say it’s worth it.  

Comments

We currently have a 30 but I don't know if it will go back to 30 if we refinance. I know it will also change cause we have PMI that will drop off and property taxes are always changing.  

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@loggia likely your loan would start over at 30 years so the number shown on the screen shot would be smaller

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@diapedesis6 if it went back to 30, then the number would be higher as that’s an additional 60 months or so at $161 a month.  

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@ahoy98 but you wouldn’t be saving it because you’d be paying for 5 extra years

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@diapedesis6 ah yes. Which is why I did 25 originally. sorry, my mind isn’t working today  

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@ahoy98 all good. My mind is always absent on tuesdays because it’s trying to get over the shock of Monday’s lol

Answer 2

I'm not super savvy in this area but. my house payment goes up almost every year because of taxes etc. doing these upgrades on your house will add value to your house thus adding more to your payment for escrow I'm assuming after it's all said and done you may still end up paying the same amount with less Interest

Answer 3

Your loan officer should be able to answer all these questions for you! Mine did when I called to calculate the numbers and for me it wasn’t worth it since my loan isn’t that high.  

Answer 4

If you’re consistent with still sending that $161 a month to your mortgage company, and applying it to principal, you could save a lot of money too.  

Answer 5

Why do a line of credit and not just pull out your equity?