I wanna take out a Home equity line to pay off my 2nd mortgage (9.00% fxd. over 20 years).Is that a good idea?
I owe about 35K on my 2nd mortgage (15 years left) and my Home Equity is about 134.5K on my property.My 1st mortgage is fine,it’s a 30 year fixed,at 5.875% and I don’t wanna change that at all.I understand that a home Equity line works like a credit card.I only wanna borrow as much as I need (in this case approx. 35K) and then pay it off.Here’s my question:Do I need to pay the amount I borrow from my Home Equity line off right away (like an Amex credit card) or can I pay it over time? I’m thinking about just to pay like a $ 1000 each month (out of the ELOC) on my 2nd mortgage (right now I’m paying approx. $ 360.00 per month),because I’m afraid that the interest on the ELOC can go up to max.18%,since it’s variable (the offer right now is 5.39%).Any suggestions anybody?