Looking for Solid Mortgage Advice

[jologan79]

Bare with me as I explain this.

So, I've been given an opportunity to move from TN to TX for a new position with  my current employer.

However, my home situation if kind of difficult.

Our home value has drop significantly due to the 2008/2009 market and we have never fully recovered.

We have a mortgage for $125,000 and a HELOC which is at $25,000 (interest only at 7.5%)

Currently assessment states that we can expect to sell between 130K-135K. 

So if we sell at 130K we will have a 20K shortage.

Here is what I am considering to do.... refinance the 25K HELOC to a 4-5year term and sell the home we are currently in.

This will give us some time to adjust to the new location without jumping right into a house and will allow us to build credit more. What do you all think?

[StartingOver10]

How would you refi the HELOC? Don't think its possible to refi it when it is unsecured.  By unsecured I mean when the value of the collateral is less than the outstanding loan amount.

When was the last time you received an updated valuation on your home from an agent - not the HELOC lender (they always appraise low). 

Remember appraisals are based on what the use for the appraisal is - and it does change the valuation. As a brief example, one of my clients pulled out funds from their home with a HELOC in Sept 2014. The appraisal came in at $260k. I sold the house for him in April 2015 and the sales price was $309k.  i ignored the previous HELOC knowing that it was low. 

So first, check the value of your home with a good, experienced local Realtor in your area before you do anything.