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Need advice on rental refinance
Old 08-09-2010, 01:50 PM   #1
Confused about dryer sheets
Join Date: Oct 2009
Posts: 3
Need advice on rental refinance

Currently have a $40K balance on a rental condo at 6.74% with 13 years remaining on 15 year loan. Thinking of taking the Penfed 5 year home equity loan at 3.99 % to payoff the condo, and try to payoff the loan in 2 years. Is this wise? Most of our retirement money (90%) is in 401K/IRA rollover accounts. Should we just save the money as a cushion?
The monthly loan payment now is approx. $500.00. We hope to retire in 2 -3 years and were trying to reduce loans. The home mortgage balance is $93K with a monthly payment of $462.00 at 3.85%. No other debts.
We would welcome your thoughts on what to do.

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Old 08-09-2010, 04:36 PM   #2
Recycles dryer sheets
Join Date: Sep 2007
Posts: 185
Depends on your risk tolerance. HELOCs are variable rate loans. So they could go up substantially, but will probably not go up, if at all. But they could. You have to ask yourself: 1) how much would you save in interest during these two years if the HELOC stays the same and how much will you save if the HELOC goes up to say 5%, and 2) is the risk worth it?

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Old 08-09-2010, 09:00 PM   #3
Dryer sheet aficionado
Join Date: May 2010
Posts: 44
Try to get rid of all debts before you retire.
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Old 08-12-2010, 03:14 PM   #4
Thinks s/he gets paid by the post
Join Date: Feb 2008
Location: Indialantic FL
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Penfed does not offer that product for rental properties. They have a 10 yr balloon product that is not competitive. I had to go elsewhere and using a local bank got a 4.625 30 yr fixed loan on our new vacation rental home.
"The four most dangerous words in investing are 'This time it's different.'" - Sir John Templeton
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