Best refinance option?

Question

I am refinancing my home to get my ex-husbands name off and allow me to obtain HELOC to buy rental properties. Which would you go with? I come from a family that belives in paying less to the bank so pay more per month to pay it off faster but I do not think that is the investment mindset?

15 year fixed

6.54%

$428.02/ month

20 year fixed for 15 years, balloon at year 15 and we can look at doing a modification for the balance and get you a new rate or you can pay off the loan.

6.74%

$372.41/ Month

25 year Fixed for 15 years, balloon at year 15 and we can look at doing a modification for the balance and get you a new rate or you can pay off the loan.

6.94%

$345.23/ Month

30 year fixed for 15 years, balloon at year 15 and we can look at doing a modification for the balance and get you a new rate or you can pay off the loan.

7.14%

$331.41/ Month

Mike Schofield · Answer

Tara,

I wouldn't worry too much about what is the investor mindset, and worry more about what you are comfortable with. There is a psychological benefit to having your home paid off or at least down. If that is not your concern, there are some good options out there. I'm personally not a huge fan of balloon notes, but they serve their purpose. For most buy and hold loans you are going to need 20% down, closing costs, and at least 3 months (sometimes 6 months) of mortgage payments set a side. If you are only considering the loans you mentioned your last option is the one that set's you up to save that the fastest, but you'll have to be good about saving it.

If you have enough equity and pretty good credit there is a first lien line of credit called the All in One loan. It enables you to pay off your home quicker than traditional loans, but have the equity available to use for investments or emergencies as needed without having to constantly go get another home equity loan.

Don't hesitate to reach out with questions if you have any.

Best refinance option?

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