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My 65 year old aunt has a $30 000 mortgage that is up for renewal. She also has a $8000 outstanding balance on the line of credit. Is it to her
advantage to transfer the mortgage to the existing home equity, or
is the advantage only to the bank?

thanks
Marlene

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Marlene,

The interest rate on a HELOC is usually high. So, I think, it will be of no use if your aunt transfers her first mortgage to the existing HELOC as in that case, she may have to make higher monthly payments.

liaoyu03 · Joined: 09 Sep 2007 Posts: 166 4.48 Dollars($)

It's not advantage to her to transfer the mortgage to the existing home equity.

jveenstra · Posted: Wed Nov 04, 2009 10:23 am Post subject: Renewal

Is the existing $30,000 mortgage a Fannie Mae or a Freddie Mac or an FHA mortgage??
If you do not know, call the lender and ask if one of those entities owns the mortgage.
Ther are special refinance programs now and they exist for people who have mortgages owned by one of those entities.
If it is a Fannie Mae or Freddie Mac mortgage, call the lender and ask to refinance under the special program. Rates are low. You could be able to get a 30 year fixed mortgage to replace the resetting mortgage.
Is the line of credit at least $38,000 so she has the option of transferring the $30,000 first mortgage to the line of credit? That is an option. If by line of credit, you mean a Home Equity Line of Credit (HELOC), as opposed to a personal line of credit, the HELOC rates are low now and that would be ok for a few months to a year(s) before the rates start rising.
If a lot of equity in the property, could look into a Reverse Mortgage, which could be a HELOC also. In that case, she makes no payments and either receives a monthly income payment from the reverse mortgage or simply refinances the existing balances and takes no money monthly.

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