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06-27-2007 08:19 AM
06-27-2007 08:23 AM
06-27-2007 10:17 AM
06-27-2007 06:50 PM
OneMortgageGuy wrote:I think a lot of people get the Heloc mixed up with a fixed 2nd. They are both seconds but a Heloc is a 25 year I/O and a Fixed 2nd is P/I or I/O and can be 5,10,20,15,20, and 30 Years.Im just making up rates and I have no idea what you will get in a year...Lets say you get a Heloc for 20K at a 8.25% 25 Years I/O... Your payment will be $137.50 I/O. You can pull out and put back as much or as many times as you need to. Your min payment on the balance is Interest/Only. To pay it off in 5 years you need to pay 407.93 and that if the interest does not go up. Rate will only go up when prime rate goes up.Lets say you do a fixed second for 20K at a 8.25% 30 Years P/I... Your payment will be $150.25 P/I. You will get 20K and if you make a 10K payment you payment will still be $150.25 P/I. To pay it off in 5 years you will need to pay $407.93 just like the Heloc but the rate will never change.For a Heloc shop around because lots of banks are well below prime rate. Keep in mind Heloc's have little fee and even no closing cost option.A Fixed Second will have a higher rate and start at zero points but you can buy down the rate. That's up to you on points and not the bank! The closing cost on a fixed is higher. As for the term... Price out a all terms and see what rate is better but most of the time they are just about the same. If a fixed 30 or year term is the same... I would take the 30 and make the 5 year payment but that's because the way I'm paid.You really need to think how long you need to money for.