I'm about to finish repaying my housing loan. And about to retire. I've been told that I could refinance it to get funds to use for important things like children's education or renovation.. Is that a good idea?
2006-12-20 02:02:44 · 6 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
You enjoy giving a bank a dollar in interest so can save 30 cents on that dollar come tax season. What a bargain.............NOT!!!!!!!
Pay off your mortgages and own your house free and clear. There is no reason to give a bank 10K interest every year to save 3k on your taxes. Would you give a relative or friend 100 dollars if they only promised to pay you 30 dollars come April 15????? NOOOOO
2006-12-20 02:33:53 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Refinancing for home improvements is OK because all of the interest would be deductible.
The other things you mentioned are personal and you can only have a mortgage loan of $100,000 where the interest would be deductible.
I would pay off the remaining mortgage as you are scheduled to unless the mortgage company would discount the amount you need to pay off the balance.
You could then take out a home equity loan of $100,000 to pay for the other items or buy a new car etc. You only pay interest on the amount you borrow against the line and the interest would be deductible.
Don't go near a reverse equity loan unless it is your last resort. This is a way to give your equity and eventually the home to someone other than your family. Even as a last resort I would first look at doing a reverse equity loan with family members.
2006-12-20 12:06:18 · answer #2 · answered by waggy_33 6 · 0⤊ 0⤋
If you're about to retire you may not want to refinance and take on additional debt. However, you could look into a reverse mortgage. Reverse mortgages essentially pay off your loan balance and give you your equity in cash. This way you no longer have any house payment and you have money for renovation or children's education. You can invest that money in mutual funds or even CDs and grow your money and maybe even make a little extra income with dividends and such. The downside of a reverse mortgage is that when you sell your house, you won't really get any money out of it. Since you've already removed your equity, the bulk of the money will go to the bank. Reverse mortgages are really ideal for people who don't plan to move again after you retire. You should definitely talk with a broker about your options. Good luck.
2006-12-20 10:10:31 · answer #3 · answered by aviellesmom 2 · 0⤊ 2⤋
1. You need money to do renovation.
2. You need money to pay off your high interest loan, such as credit card loan.
3. You need money to start a businesss (Bank don't usually finance a new busines, because it is too risky).
4. It is the cheapest way to borrow money when you use the house as collateral.
2006-12-20 10:12:28 · answer #4 · answered by Anonymous · 0⤊ 0⤋
If you don't need the $$ and have a good rate I would not do it. If you could get a better rate or if you need the $$ for something that you are willing to make payments on with possibly a high interest rate you can do it. I have heard of too many people who get in backwards
2006-12-20 10:52:21 · answer #5 · answered by Anne D 2 · 0⤊ 0⤋
No. Use your retirement savings for things like that. Your home is an important asset and you should protect it.
2006-12-20 11:10:54 · answer #6 · answered by Anonymous · 0⤊ 0⤋