should i refi or take out equity on my house? difficult situation?

Question

i have revised my question from earlier...i have a house that my brother helps pay helf of everything (closing cost, mort. repairs.....) the deed has my name only. our apr is 5.3% fixed for 30yrs, we have had it for 3yrs. and bought it for 170k and its valued at 300k or so. he has debt of about 30k, he has asked me to refi or take out a heloc, our in another senerio buy him out with about 30-40k but it stil means taking out money from somewhere, he says he wants to continue to assist with 1/2 of everything and give me $1000/mo. for the loan and $400 for the mortg. our very last resort is selling which i really dont want. so what is the best way to help him out of his debt and not lose money in any way. please help us out.

who is a good bank to go with and what should i ask for a heloc i keep hearing that it is my best bet

Answer 1

This is indeed a difficult question as you could go either way but it depends on the individual situation. I recommend having someone show you the benefits of both and then you ultimately choosing the loan scenario that works best for you. I know this doesn't answer your question but its an honest answer and remember no loan scenario works for everyone. If you need any help or have any further questions feel free to contact me. wwwdantadgerson.com

Answer 2

Dont do a full refi if you happy with your payments: Remember that if you refinance your taxes will be reassessed to the market value of the property today. So you could hurt yourself from 3 years ago. If you are going to get a Heloc which is a bad idea. Than go to a Credit Union. They have the best rates and lower closing costs. Help a lady earlier in the month with same thing and she was pleased with this advice. If you really want a slam down excellent deal than go with a Closed end 2nd fixed rate and fixed term. Same as heloc it will not be considered a full refinance so you dont have to do appraisals and closing costs. Small fee to you. Beware that when that extra money is pulled that you both have to pay it back so make sure he's paying on the 2nd so not to screw up your credit. Hope this answers your question and good luck!

Answer 3

I would take a different approach, I would not get a heloc the rate is around 9.25 at best 8.25 for the 1st six months then it goes usually to prime plus 1% , remember that the fed has raised prime 17 of the last 18 times although they have paused for the moment there is no guarantee that they will not raise the rate again. Consider this option buy down your rate you should be able with good credit, at 70% loan to value (witch is where you will be if you owe 170,000 on the house now plus 40,000 cash out) to get the rate to about 5.5 % on a 30 year fixed with a 1.5% to 2% loan discount point. that would be about $5000 your payment would be 1192.36 p&i ONLY leaving you 200 for taxes and insurance your payment now based on 170k is 944.02 for p&I and if you did a heloc wich is interest only would be 308.00 for a total of 1252.02 so it would be cheaper over the long term to do a refi.

Answer 4

Because of your low interest rate I would steer away from a refi and go ahead and pull out a second loan (HELOC). If you are worried about payment shock you can pull out enough to help cover the payments in case anything happens or your brother fails to hold up his end of the bargain. By having the extra money on hand you could then look towards some investments to pay the loan off. If you would like to discuss your options further feel free to e-mail me at [e-mail].

Answer 5

5.3% is a super interest rate -- I would take out an equity line and only use what I absolutely must. Then when interest rates fall again (and they will), you can refinance and roll your euity line into a new loan. However, I don't know if I would do this for anyone -- you do risk your home and credit. You better be sure of your brother.