Posted on: 14th Apr, 2010 09:24 am
Hello,
I own a home in PA, with 0 debt. I am in the process of purchasing a vacation home in DE. Although I can afford to pay cash outright, I would rather keep my money in the market and take advantage of low interest rates.
I have a few questions:
1. should I take out a 15-year HELOC on my PA residence to pay for the second home? (variable rate, based on prime, presently 2.75%).
2. should I get a mortgage on my residence in PA and use that money to pay for my second home in full?
3. should I get a mortgage on the second home instead?
thanks for any clarification you can give me.
I own a home in PA, with 0 debt. I am in the process of purchasing a vacation home in DE. Although I can afford to pay cash outright, I would rather keep my money in the market and take advantage of low interest rates.
I have a few questions:
1. should I take out a 15-year HELOC on my PA residence to pay for the second home? (variable rate, based on prime, presently 2.75%).
2. should I get a mortgage on my residence in PA and use that money to pay for my second home in full?
3. should I get a mortgage on the second home instead?
thanks for any clarification you can give me.
well, as you undoubtedly know, the risk on the home equity line of credit is that rates are always subject to change. by the same token, 2.75% is an awfully low rate, and would enable you to make sizable principal payments if you so chose.
refinancing on your existing home is, of course, a viable alternative, as is the thought of the new mortgage on the new vacation home. i'd suggest that you discuss the ins and outs of each with your tax advisor. i don't believe there's any particular risk in mortgaging either of the properties. it seems like you've got your proverbial ducks in order to begin with.
refinancing on your existing home is, of course, a viable alternative, as is the thought of the new mortgage on the new vacation home. i'd suggest that you discuss the ins and outs of each with your tax advisor. i don't believe there's any particular risk in mortgaging either of the properties. it seems like you've got your proverbial ducks in order to begin with.
the temptress isn't always the right one to look at, though, as any of us over the age of 16 know.
well...maybe i should amend that age to 30 or so.