HELOC question – what would you do?
My husband and I purchased our first home in January 2005. We put no money down other than $ 1500 earnest money, which we got back at closing. We had never owned a home before and really didn’t know what we were doing.
The house was purchased for $ 199,900. We were told that PMI was bad, and we didn’t have any money to put down, so we did an 80/20. The 80 portion is a 30 year fixed at 6%. The payment is $ 1236.00 a month, and was originally financed through Greenpoint Mortgage but was quickly sold to Countrywide in the first 3 months. I don’t have a problem with this mortgage or the rate.
The HELOC was originally $ 41,000 and an adjustable rate, and is still through Greenpoint Mortgage. It’s ranged from as high as 11.5% to the current 8.25% interest rate. All of the payments each month (the payment that is due) is going towards interest only, so I still owe $ 40,996.11 as of today, after nearly 4 years of payments – and yes, I’ve paid higher than the minimum payment, but it seems to be eaten up by fees every year.
The HELOC is listed on my credit report as a revolving account, so it looks like I have 40k of credit card debt. My current credit scores range for all three bureaus around 720.
I really hate the HELOC, but because my other loan is only 4 years old, I only have about $ 8k of equity.
Here’s the question. Knowing the mortgage industry right now and how hard it would be to get a loan, do I try to refinance the HELOC and my original loan into one loan? I’m afraid of losing the 6% interest rate if I do that. Do I just focus on the HELOC and throw every available cent into it to get it paid off as fast as possible? Or should I try to refinance just the HELOC to get a fixed rate – is that even possible?
I need suggestions 🙂