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Interest Only

Let me know if this is this loan is doable and if you can help:

Home value per Zillow  $1,125,000 (10 Rodrigues Lane, Walnut Creek, CA) (My credit score is about 790)
First loan $355,000 (3.25%)
Heloc $451,000 (int only until 2016 – currently just 2.75%, then I must pay principal also)

My concern is that if I leave the HELOC in place, I could be faced with a MUCH higher payment when I must start paying principal on it in 2016 or faced with much higher rates in the future.  My goal is to lock in the lowest rates I can for as long as possible with interest only payments.

I DO understand that the lending establishment considers it a REFI WITH CASH OUT if new loan proceeds go to pay off a HELOC so what I would like to do is the following:

1.    I will pay off the HELOC just before  new first loan closes (so that this is not "cash out")
2.    Get a new first for 70% of value ($787,500), interest only, is this doable at 3%?
email is the fastest and best way to contact me.  I never answer the phone unless we have a pre-set call as I am always involved in a project.  Those who use email will get my maximum attention, response and action. larry-klein@comcast.net
  • November 15 2012 - US
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Answers (1)

Unfortunately even if this option was possible, in the end you would still be doing a "cash out" refi with the new first loan because you are not only refinancing the 355,000.00 current 1st mortgage, you will also at closing, take an additional 451,000.00 cash out to repay yourself. You may want to consider alternative financing ideas if you have liquid assets allowing you to pay off the HELOC. If you have questions or need advice you may contact me @ [email removed by Zillow moderator]..I have business partners that handle these kind of transactions, let me know if I can help.
  • November 15 2012
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