Question : 2nd Home is it better to get an equity Loan to purchase or a 1st mortgage?
We own our house fully No mortgage value approx $550k. We are thinking that we like to retire early to near the beach. Currently we found nice homes with land in that area for $175k. Is it better to get a home equity for the full cost of the Beach home plus any other small debit (approx $75k 2 cars and a timeshare) or continue to pay on the individual debits and add a Mortgage for the Beach house?The ultimate goal would be to get settled into the 2nd home and then sell the current home pay off the balance and then put the rest in an investment with monthly dividends to use as retirement income until we reach retirement age and also maybe get a parttime job.
- asked by helenta35
All Answers:
Answer #1
d
- answered by reema
Answer #2
I would suggest a 1st mortgage. You wouldn't wantto risk your first home if you finances had adrastic change.
- answered by becky w
Answer #3
I am a mtg broker. I would do a fixed HELOC andcombine all your debt into it. If you pay all yourdebt separate, you are paying interest on thecars, credit cards, etc which are NOT taxdeductible. Your mtg debt is. Congrats on havingyour home free and clear!
- answered by mtgguy
Answer #4
Get a new mortgage for beach house. Recommendthat you payoff the cars and timeshare as soon aspossible without taking out the equity. If youtake out home equity you can only claim up to a$100k for a tax write off. So everything over a100k would not count any way.Retirement is aroundthe corner. Good Luck!
- answered by Unique
Answer #5
Get a first mortgage, defiantely.By getting theequity loan, you are (as you know) putting yourprimary residence on the line for the loan. Shouldanything somehow come up and you (Heaven fobid)default, then you lose Your primary residence, andall of the hard work that went into paying it offhas been completely lost, and you have nothing toshow for it, except a downgrade in livingquarters.If you get the first mortgage, andsomething happens, then all you lose is yourretirement home, and a bit of crediblity on yourcredit score.
- answered by Bradly S
Answer #6
Rates are the same on primary and 2nd homes (aslong as it's not near your primary...if so, somewill consider it an investment property.)Youroptions are: get a better tax break by taking outa first on your current home. Rates are better ona first mortgage than a second, but the closingcosts will be higher. Use that money for the 2ndhome.orTake out a loan for the 2nd home. Taxbreak isn't as good, but if something were tohappen with your finances and you were unable tomake house payments, your 2nd home would beforeclosed upon instead of your primary.HELOC'sare risky do to rates being on the increase andthe fixed ones have higher rates...the closingcosts are extremely low, though.Have your loanconsultant prepare numbers for all the scenarios,then take them to your accountant/tax preparer!
- answered by KL
Answer #7
I'd love to help you out with this depending onthe state you live in. I'd recommend against aHELOC you'd be better off with a 1st mortgage. Contact me at 877-LOAN-103 and ask for Josh if youare serious.
- answered by Wishkah
| 
measure and fulfill your financial needs
