Lender411.com Articles Home Equity / HELOC

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This Fall one of my regular clients came to me asking about a 2nd Mortgage. After about a half hour of being educated on inboard and outboard engines and what a 30 foot cruiser is we started talking numbers. He had already spoken with the salesmen at the Marina, his local bank too. We compared the boat loan to the HELOC his bank offered, to my idea's.

When we started this conversation my client had an existing loan on his house at 6% fixed for 30 years, taken out about 4 years ago. The Boat guy offered a couple different terms, the local bank wanted to go with a HELOC at 7.5% (adjustable). My thoughts were why take on another payment and add to your monthly interest payments, when you could save money all the way around. Not too many people in this country are in my clients situation. His balance on the house was about 65% loan to value, credit and income are well off.

Twenty four days later he showed up at the Marina with a check and paid for the new toy in full. He went from a 30 year to a 20 year fixed rate mortgage and from 6% to just above 4%. This saved him almost six years of mortgage payments. He was thrilled to be the proud new owner of a "project" and I was happy to help him save thousands over the next twenty years. When thinking about making a change it pays to explore your options. All it takes is a conversation and an open mind. Were going fishing for Salmon this summer, if he installs a new engine.

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