Posted on: 29th Nov, 2010 11:13 am
My wife an I have two mortgages on our home. The first is our primary, which we refinanced earlier this year as a 5/1 ARM. The second is a home equity line of credit, opened in 08 with a 48k balance at 3.75 currently. We would like to pay down the home equity portion completely within the next two years or so. We have plenty in savings as well for an emergency. Does this make sense if we are planning on selling within the next year or two?
Hi damonloop!
Welcome to forums!
It is your discretion whether or not you want to sell off the property within 2 years. However, if you wish to sell off the property, then it will be a good idea to pay off the home equity line of credit. This will leave you with your primary mortgage alone. While you sell off the property, you can pay off the primary mortgage with the sale proceeds.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It is your discretion whether or not you want to sell off the property within 2 years. However, if you wish to sell off the property, then it will be a good idea to pay off the home equity line of credit. This will leave you with your primary mortgage alone. While you sell off the property, you can pay off the primary mortgage with the sale proceeds.
Feel free to ask if you've further queries.
Sussane
Does not make a world of difference
What is the difference if you pay it off in full tomorrow and sell the house the next day
You have the same amount of money either way.
You are asking about pay off in two years, not tomorrow.
There is not much difference. I am just trying to make the point, after the sale of the home, you are worth about the same thing as far as money in the bank before and after the sale
If the money you have is earning interest less than 3.75%, pay off in full tomorrow is best. Otherwise it just does not matter. It could matter just a hair more if inflation kicks in and your 3.75% starts rising.
What is the difference if you pay it off in full tomorrow and sell the house the next day
You have the same amount of money either way.
You are asking about pay off in two years, not tomorrow.
There is not much difference. I am just trying to make the point, after the sale of the home, you are worth about the same thing as far as money in the bank before and after the sale
If the money you have is earning interest less than 3.75%, pay off in full tomorrow is best. Otherwise it just does not matter. It could matter just a hair more if inflation kicks in and your 3.75% starts rising.
