HELOC promo rate vs. Fixed refi

[Laurie Isabell]

My mom quit claimed our family home to me, giving herself and her partner lifetime use with myself as remainderman. Sadly both have passed and I have realized I should have leveraged the equity in the home a year ago when rates were so low. I'm now looking at a HELOC through the local credit union that offers a 1.99% 12 month promo rate then prime plus 1% afterwards. 30% LTV. Am I better off with that since it's technically my primary or getting a fixed cash out refinance on it with a rate in the sixes? There is no mortgage on the home, but I've always been apprehensive to leverage it since it has been on my family since the 60s and was so important to my mom that it stay debt free. It's a huge home with a ton of upkeep, but also a ton of potential and I'm emotionally attached without a doubt. What is the smartest way for me to leverage this asset? Also, I added the deed set up details, as it has been confusing for lenders. Is there a way to update the deed so it doesn't come up with their names still? I had to provide death certificates, etc. Which is difficult emotionally. Thank you!

[Robin Simon]

Quote from @Brad Jacobson:

Based on current mortgage rates and your family history with the debt-free property, I'd definitely lean towards the HELOC.

The HELOC is nice for a few reasons including the fact that you can access and replace the funds at will and at whatever amount you need. With a refi, you get a set lump sum once and have to go from there. Also, HELOC rates are still low, mortgages are not, so take advantage of that intro rate while it's there!

Good luck,

Agree with this - do the HELOC credit union teaser then do a 30-year fixed rate cash-out refinance later down the road when rates come down (probably will line up pretty well timing wise when the 12 mo promo runs out!)