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Personal Finances / Credit Cards and Consumer Debt


Subject:  Re: HELOC Question Date:  7/21/2006  11:41 AM
Author:  aj485 Number:  232463 of 312185

Sounds like you can't pay it off without a penalty. How about paying it down to $100 or so, and letting that balance run for the duration of the 36 month period?

Unfortunately, it sounded like the OP was trying to pay off this loan by replacing it with another loan: My wife and I are attempting to refinance our Home Equity Line of Credit.

If they were to leave this loan in place, the new loan would end up being a 3rd mortgage, with the possibility that the 2nd mortgage (current HELOC) could be re-drawn upon. This means that the 3rd mortgage would likely increase their interest rate substantially because they are taking on significant risk, being in 3rd position. In fact, in Texas, where after the purchase, you are not allowed to take loans out in excess of 80% of the property value, you may not even be able to put a 3rd on, depending on the equity.

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