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Should I convert from my variable rate heloc (2.74%) to a fixed-rate loan (5.99%)?

My HELOC will allow me to convert to a fixed-rate loan at 5.99%.  With rates going up, would now be the time to lock in at this rate?
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February 17 2010 - Browns Mills
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Answers (4)

Profile picture for Pasadenan
You want to more than double your interest payments???  You want to get rid of the flexibility of being able to take extra equity out in the future in an emergency?

You didn't mention the index nor the margin, nor the caps, nor adjustment periods, so there is no way to know.

I don't know how you found a 2.74% HELOC, the lowest they would quote me was 7.5%.  Since a HELOC functions like a credit card, the rates are more comparable to credit cards than typical mortgages.  But many credit cards still offer a 0% introductory rate for a year or so.

You are not supposed to be carrying balances on your revolving credit lines.... Pay down your balance and don't worry about it!
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February 17 2010
Profile picture for sunnyview
I would lock it. I think that higher interest rates are on the horizon in the next year or so. Take the bird in the hand.
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February 17 2010
I would definitely convert over to a fixed loan. In this new economy, I think where ever you can get stability you should. That way, no matter what, you can decide to sell or stay, or keep it as a rental....Yo will always know where you stand. Good Luck..
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February 17 2010
It really depends on how long you plan on keeping the loan.  If it has a low balance that you can pay it off anytime, then I would keep the lower rate.  If the balance is high and you don't have the ability to pay it off in a short time, having a fixed rate is never a bad thing! 

This is just my own personal opinion...
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February 17 2010
 
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Should I convert from my variable rate heloc (2.74%) to a fixed-rate loan (5.99%)?
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Latest answer by Pasadenan
February 17 2010 | 4 answers
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