I took a closer look at it, and I am on the fence. The sixty month amortization is pretty steep. I was initially thinking of it having a 30 year amortization like an ARM.
I owe $270K, so the payment on that would be 4500/mo. My home pay off is being driven by moderate excess payments and some serious bonus/stock funds coming in the next couple years. As long as I stay employed the vesting would make these more or less automatic. But if for some reason I was no longer employed 4500/mo would be rough. Work is pretty secure, but still.
I could borrow extra cash (Plan B) (house is ~425K, @ 80% that is 340K, so 70K cash out, payment of $6K) to cushion, but each dollar I borrow that doesn't get invested at least 1.99% cuts into the savings. In the extreme it cuts it to ~2,500.
Now in the alternative (Plan C), I make about 1600/mo in extra principal payments, so I could pull about 90K @1.99% and take that rate arbitrage, which would be about $1300 over two years at the cost of surrendering my payment flexibility (which isn't that dear to me, and pretty tolerable even if I lost employment).
Mind you if I lost my job I would sell my house as I am here for work only, and there are not comparable jobs in my field. I also have an employment contract that means I'd have decent severance cash coming to me unless the fired me for cause. But frankly cause or perceived cause is really the only thing likely to cause me to be out of a job, in which case severance could be tied up in a tort.
I am playing with plans A,B, and C in my head. The biggest strike on Plan C is whether its enough to be worth my while.
I guess another version of Plan C would be an even bigger HEL coupled with a recast of the mortgage. But googling around it looks like GMAC would charge $500 to recast, which would probably kill the benefit of the bigger pull.
