Question about HELOC

I have a HELOC with a var int rate now at 8.75.

I have an "opportunity" to refi at a var rate of 7.99, with a margin of (-0.76)%. Total costs of $200.

Is this a good deal?

For two hundred bucks sure.

But make sure there aren't any hidden costs.

What about a fixed rate buy-down to 6% with costs rolled into the loan?

Costs are about $2k, but the total payout is about a $6k savings overall, with lower monthly payments.

How long do you plan to stay in the house?or own it?

As long as I can.

Have the broker run the numbers and tell you how long it will take you to recoup the closing costs (in years). If you intend to hold the property long enough to recoup the costs, then I think buying down the rate is a very good idea.

I guess I won't have to do that since I don't think I will sell the house at least until it is paid off.

Thanks for the advice.


Read closely the disclosures and penalties. If you don't see anything funky, $200 is an awesome deal for a refi.

I have another offer pending with a 7.19% rate. However, buying down the rate is still the lowest cost overall.

Well, I'm not a big buy down the rate guy but again, the broker should be easily able to tell you how long it will take you to recoup the costs of the refinance and rate buy.

If you plan to stay in the house longer than the amount of time it will take to recoup the closing costs/points then its worth it.