I have a First Mortgage with a balance of $83,000 at an interest rate of 4.875%. It was refinanced 5-6 years ago at 15 years, and my principal/interest payment is $1,450/month I anticipate payoff in about 5-6 years.
I also have a HELOC in the amount of $125,000, interest rate of 3.64%, gotten two years ago. My interest only payment is approximately $360/month, 10 year draw followed by conversion and a 20 year payback. Finally, I have a 3rd HELOC against my parents house with a balance of $77,000. It is like the previous HELOC and at a rate of 3.99% with current interest payment of $480/month.
MY PRIMARY GOAL, is to have as much of this debt paid off in the next 10 years as possible. I want to get the parents HELOC paid off as quickly as I can. I would like to increase my monthly budget money by $300-500 so as not to struggle as much with the bills. I believe my house appraised around $265,000 3 years ago.
What would be the smartest way to proceed? Should I refinance my Primary mortgage to a new 30 year fixed at approximately 3.5% which will take my primary payments from $1450/month to less than $500 saving me about $900/month. With that $900, should I take as much of it as possible to pay down one of the HELOCs before they go into the 20 year payback period. I am considering putting $400 of that back into my monthly budget, thus having only $500 extra to pay against the HELOC. Mistake? My instinct is to go against the larger one, but I would like to pay off the smaller parents one asap. Mistake? It seems to me that after 10 years at $500/month (plus the $480 a month interest payment would still be made) that this HELOC would be paid off in about 12-13 years. However the Larger HELOC at interest only for those years would still have the full $125,000 going into payback. Thank you!
Source: http://www.zillow.com/advice-thread/First-Second-Refinance-Advice/412460/
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