@Tiersha wrote:Ok I am horrible at Math.
I have a heloc, pretty much maxed out due to a build.
I can't pay it all off but I can pay a healthy chunk off (10k=50%) with the balance pd when I sell the house. That being said...is it better to pay the big chunk towards principle of the current loan or have the loan recast with the new amt of 10k?
I assume a payoff of a loan and a reopen of a new would actually drop my score?
I can't understand your question. If you "pay the big chunk towards principle of the current loan" isn't that the same as "hav[ing] the loan recast with the new amt of 10k"?
But certainly you should pay off as much of it as you can.
If you're asking whether the 10k should be paid towards your first mortgage or towards the HELOC, it should be applied to the HELOC.
@Tiersha wrote:My understanding is that a recast of a loan is essentially a new loan with a new amt owing, new interest and new terms vs current loan and just paying down principal.
I don't see any reason to "recast" your HELOC. I would imagine your present interest rate is lower than the one you would get if you "recast" the loan in today's high interest rate climate. And I would imagine that paying down the loan would help your scores, while paying it off and opening a new loan would hurt your scores. And I believe there would be a fee to "recast" the loan.