Agent

Best refinance strategy for mortgage with small balance

Home equity product can pay off first loan, offer liquidity

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DEAR BOB: Is it a good idea to refinance my residence with a home equity loan? --Miriam G. DEAR MIRIAM: You raise a fascinating question. If you have a high-interest-rate mortgage with a small balance, you might be smart to obtain a home equity line of credit (HELOC) for a larger amount and use part of that money to pay off the old mortgage. Purchase Bob Bruss reports online. That's what I did a few years ago. I had an old $15,000 first mortgage on my second-home condo at 9 percent interest. The condo's market value was about $175,000. Wells Fargo eagerly approved a $100,000 home equity line of credit at the prime rate. I used $15,000 of that amount to pay off the old mortgage and had $85,000 remaining on my line of credit. I saved interest and it's nice to have that credit line just waiting for my signature on a check. DOCUMENT MARKET VALUE TO PROVE STEPPED-UP BASIS FOR INHERITANCE DEAR BOB: My husband passed away last September. We own two homes in joint tenancy with right of s...