Hi I need someone’s help in figuring out what I should do regarding loans. I currently have a mortgage for $109,820 with a fixed rate of 11.5% and a prepayment penalty of $5,000 if I pay off before March 2011. I also have a HELOC in my in-laws name for $77,000 with an adjustable rate of 4.5% right now interest only payments due. I have about $4,500 a month that can be used to pay off my loans. I was thinking about refinancing the 11.5% loan. The company I plan to use has a 3/1 interest only loan with a rate of about 6.5% (Maybe). Reason I say maybe is their rate is 5.7% but may have rate adjustments based on my credit. So I am not sure how to figure out the interest only stuff. I know I need to refi the 11.5% loan but not sure if I should wait until March to avoid penalty or do it now as the reduced rate will offset the penalty.
A Little side note the reason the rate is so bad is because I had a BK and Foreclosure on my record recently so I got a hard money loan. Yes I did run the numbers asked for help etc and it was better to go this route than to rent until I could get a better rate.
Thanks
