refi/equity line? please respond asap - Posted by shannon

Posted by Brent_IL on July 31, 2003 at 14:30:17:

Hi Kieth,

I think it’s time for coffee, but I’m blanking out. What are the tax differences between a HELOC and a re-finance?

refi/equity line? please respond asap - Posted by shannon

Posted by shannon on July 30, 2003 at 13:24:49:

I have a house that I am looking to pull some equity out of so I can keep my business afloat. The banker is trying to talk me into going with an equity line of credit verses a refinance. Could somebody reiterate to me the benefit of that if there is one. It seems I read somewhere that doing a line of credit (for one reason or another) wasn’t as advantages as doing a refi.
Thanks in advance.

Investment property? - Posted by Wayne-NC

Posted by Wayne-NC on August 03, 2003 at 12:04:50:

Is this house your primary residense? If it is go with the HELOC as it is the best RENEWABLE source of funds.

Re: refi/equity line? please respond asap - Posted by Scott_FL

Posted by Scott_FL on July 30, 2003 at 22:36:27:

An equity line, (HELOC) is definitely more flexible. Closing costs are far less, (usually $1000) or less.
Also you are less limited by LTV issues. HELOCS can go 100%.

HTH
Scott
P.S. I am a licensed mortgage broker.

Re: refi/equity line? please respond asap - Posted by Steve_nc

Posted by Steve_nc on July 30, 2003 at 16:19:27:

Shannon-

An Equity Line is similar to a credit card except you are using you house as collateral. You are qualified for a predetermined lump sum of your equity and you can use it when you need it. Often by wrighting a equity line check. As you pay back your loan you can again withdrawl the money and use it again. With many equity lines you are only required to pay interest only, and the priciple paid is up to you. In-addition, my equity line is set at the prime rate about 4%, and as I pay it down the monthly interest payment gets lower as well. Its very flexable, and if one is disiplined can be very helpful.

A straight refi is usually a conventional loan with set payments for a set period of years at a set payment. Ok too.

Steve_nc

Re: refi/equity line? please respond asap - Posted by keith hutson

Posted by keith hutson on July 30, 2003 at 22:25:31:

There may be tax benefits of one over the other? Costs of a refi might be more too.
KHutson