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re: The reoccuring question.. should I pay off my mortgage?
Posted on 9/21/12 at 10:56 am to LSUStjames
Posted on 9/21/12 at 10:56 am to LSUStjames
quote:
should I pay off my mortgage?
Pay it off, then promptly take out a HELOC with a good rate that you can draw on if ever needed. I can't help but think rates are going to skyrocket in the coming years, and you'll be in good shape if you have access to cheap money through the HELOC.
2
Posted on 9/21/12 at 11:06 am to Putty
I can't imagine many if any banks are offering a lock option right now on HELOCs.
HELOCs generally offer prime + %.
HELOCs generally offer prime + %.
Posted on 9/21/12 at 12:13 pm to Putty
quote:
Pay it off, then promptly take out a HELOC with a good rate
Absolutely not.
With rates as low as they are, it pays to borrow if you qualify for the best rates. You should refi the mortgage, a cash out if possible. If you can get the best rates you should be borrowing as much as you can. It is a license to print money.
Seriously, if you can borrow at nearly zero real interest, then your ROI is basically zero by paying it off early. Keep the money.
A HELOC is also good to have.
ETA: Just to be clear, I referring to a case where you qualify for the best rates and you can borrow for 30 years at a fixed rate. Adjustable rates won't help here.
This post was edited on 9/21/12 at 3:42 pm
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