5.15 fixed or 5.Variable?
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5.15 fixed or 5.Variable? (by Patrick [VA]) Dec 3, 2018 1:31 PM
       5.15 fixed or 5.Variable? (by WMH [NC]) Dec 3, 2018 1:36 PM
       5.15 fixed or 5.Variable? (by Richard [MI]) Dec 3, 2018 2:58 PM
       5.15 fixed or 5.Variable? (by Tom [FL]) Dec 3, 2018 10:00 PM
       5.15 fixed or 5.Variable? (by Chris [CT]) Dec 4, 2018 9:29 AM
       5.15 fixed or 5.Variable? (by Pmh [TX]) Dec 5, 2018 7:35 AM

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5.15 fixed or 5.Variable? (by Patrick [VA]) Posted on: Dec 3, 2018 1:31 PM
Message:

So as I said in a different thread, I am putting about 25k into one of my rentals.

I have a HELOC in place on a different rental with one of the national banks. Currently, their interest is 5%. But it is variable.

If I go to my credit union, they will give me a 5.15% fixed for ten years, but they told me closing costs would be between 1000 and 1500.

If the variable rate goes up, I could take a beating. If it stays close to where it is now, I could be sopending 1500 to close on a loan needlessly.

What would you do? No cost, but pay 5% variable on 25 k for ten years, or pay 1500 to get 5.15 fixed for ten years.

Thanks for any advice. --70.184.xxx.xx




5.15 fixed or 5.Variable? (by WMH [NC]) Posted on: Dec 3, 2018 1:36 PM
Message:

Rates are not going down. Variable is always scary and we would never do that unless we had the means to pay it off if rates went up. --50.82.xxx.xx




5.15 fixed or 5.Variable? (by Richard [MI]) Posted on: Dec 3, 2018 2:58 PM
Message:

How long do you anticipate before you pay it off? Less than 5 years, take the variable. Full 10 years, probably the fixed. The 1000-1500 won't help if payoff too soon.

Just my opinion from here on.

I don't think rates will be going down in the next 2+years. Without trying to get political I think the Fed is deliberately raising rates. Already housing is slowing down. If you want to get out near the top, consider seriously doing it soon. Now even. Refinance now because rates Will likely climb. Again, just my opinion.

--23.121.xx.xxx




5.15 fixed or 5.Variable? (by Tom [FL]) Posted on: Dec 3, 2018 10:00 PM
Message:

The HELOC is No cost, but pay 5% variable on 25 k for ten years. The problem with the variable is what is the highest it can max out? 5% or 7% so in a few years it could be 6 or 8 % correct me if I am wrong on the 5% variable? OR if the interest rate shot up in the next several years it could max out at 10 or 11%???

UNLESS you intend to keep the HELOC for a short period of time, do your repairs and pay it off sooner rather than later. But if you keep it for the 10 year period then your not in control of the variable rate.

or IF you pay 1500 to get 5.15 fixed for ten years. Then you know your monthly payments are set and will not increase over 10 years. PLUS you may want to carry the loan for 10 years and it will be a benefit to carry the loan on the unit for that period of time.

--99.56.xx.xx




5.15 fixed or 5.Variable? (by Chris [CT]) Posted on: Dec 4, 2018 9:29 AM
Message:

How long do you plan to hold it for? $25k should take long to pay off, get rid of it next year and keep the variable. The Fed isn't going to really move rates for a bit. --24.187.xxx.xx




5.15 fixed or 5.Variable? (by Pmh [TX]) Posted on: Dec 5, 2018 7:35 AM
Message:

Just pencil it out and factor in reset cap (if there is one) and do the comparison to fixed --166.137.xxx.xxx



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