A good time to refi OR wait?

4 Replies

Hello BP,

Shortly after the shutdown in March I decided to get a HELOC. I'm 8 years into my mortgage at 3.62% for 30 yr fixed. I recently spoke to a mortgage broker who advised to do a cash-out refi and close out the HELOC since its a variable rate interest only. This way I would have a set payment per month and have cash on hand.

Would this be a good time to consider a refi OR leave it as is since I'm already 8 years into my ownership? She said that the rates now are around 3% which would save me about $250 per month with HELOC.

Any thoughts?

Thank you,


Is this on an investment property or personal residence? Thats a great rate for an investment property, with closing costs it will take a long time to make up the difference for a refi. Also, Fannie Mae just added a new fee for cash out refis. Yes the HELOC is variable rate, but you dont have to pay interest if you arent using it. Also less closing costs. About the only way it would make sense to refi is if you are CERTAIN you would hold this property for a long time. It all depends on you goals and strategy.

Hi Zach,

This would be for my primary resident and the idea behind heloc was to use to for an investment. However, if I were to do a cash-out refi then I would have no variable rate it would be included in my 30 yr fixed.


@Armand P. - I would go for HELOC, yes the interest rate is variable, i don't see the interest rate is going to increase in near future. Also, in HELOC you pay interest for the amount you have withdrawn which is not the case for refi which is purley on Amortization schedule where you pay ton of interest way early in your schedule. Shop around you will find lender who would do HELOC with promotional rates of .99% for the first 9-12 months.. Google it.. and make ton of phone calls/

I recently got a quote for a personal residence rate of 2.25%. i would shop around and see what you can get. if you think you will be in this house for a long time, consider the refi. The bank will give you the closing costs up front. You should compare that with the amount of interest saved with the lower rate. 

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