A buddy of my asked for an opinion. Please give some advice.
he still owe $200k on a investment property which have an interested rate fixed for 30 yrs at 6.38%. His bank on his own personal home offer a HELOC home equity line of credit at 3.5% (or prime minus .5% for life) ammoritize at 15 yrs.
What this mean is that he can pay-off his investment loan but carry a line on his personal home and it will gives him an additional ~$350 extra cash....
1) good idea or bad idea?? why? (detail please, and no 'go ask an accountant')
2) he's not hurting for $350 but it's hard to resist at 3.5%, is this a dangeruous move?
2) what's the chances of prime rate going up to say 6-7%
thanks all
he still owe $200k on a investment property which have an interested rate fixed for 30 yrs at 6.38%. His bank on his own personal home offer a HELOC home equity line of credit at 3.5% (or prime minus .5% for life) ammoritize at 15 yrs.
What this mean is that he can pay-off his investment loan but carry a line on his personal home and it will gives him an additional ~$350 extra cash....
1) good idea or bad idea?? why? (detail please, and no 'go ask an accountant')
2) he's not hurting for $350 but it's hard to resist at 3.5%, is this a dangeruous move?
2) what's the chances of prime rate going up to say 6-7%
thanks all