Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5

I owe approx 100k. I am not sure which way is better for tax.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

Taxes aren't the issue, becuase whenever you take the mortgage deduction, you're paying $100 to the bank to avoid payind $30 to the IRS.

A rule of thumb is to refinance only if you can save two full points.

In your case, I would keep the 6.5%, and work to paying it off.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

Forget the tax. The Home equity loan is a VARIABLE rate. The rate WILL go up. The ONLY tax implication is that interest on BOTH loans is deductible. Paying more interest for a larger deduction nets LESS money in your pocket.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

Is that $100K what you owe on the mortgage or credit card bills?

Without running the numbers, if you can get 5.64%, then refinance it.

Refrain from taking a HELOC because then you've put your home in jeapordy (what happens if you lose your job and can't make payments??). The HELOC is intended to improve your home not as an emergency loan, although many people do this, and then freak out when they lose their job and can't make the payments. Had they not taken a HELOC, upon losing their jobs, they could tap into the home's equity while finding a new job.

As for taxes, keep your mortgage, and presuming you have a 30-year loan, that is 30-years of deductions when you file your taxes.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

It depends on what you want to accomplish. Are you looking to lower your monthly mortgage payments or just take some cash to do repairs or something?

Taking the 5.6 refi will lower your mortgage payment a bit. Also gives a bit of room for you to save for property taxes next year (unless yours are escrowed, then you just pay less on the month).

However, realize that doing a refi starts your mortgage all over again at day one. All the equity you have built up so far will be gone after a refi.

Keep in mind that a home equity loan does not affect your monthly payment. It adds to it actually. It's just a loan using your home as collateral.

Here's an idea to play with.

Take out the home equity loan and put the money into a high yield CD or money market account somewhere for a mid-length term, like 12 months.

Then do the re-finance and start building new equity with the new loan.

If you can handle the loan payment on top of the mortgage, that is a way to get your cash working for you.

I hope this helped you out.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

The amount you owe is very little. Keep your current mortgage.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

Skip the HEL. Are you staying in your home for another few years? If not, it won't pay to refinance.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

Since you already have the mortgage leave it be. If you want to reduce the years, you can always make add'l pmts each month on the loan, even if it's only $50.00 per month. If you have a 30 year mortgage now, you're paying about 70% on the first 15 years. That's how the banks/mortgage cos. make their money.

Should I refinance at 5.64@ (fixed rate). I am paying 6.5 now or should I take home equity loan at 5.25%?

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