Sig Forum braintrust:

Situation: Planning to retire in about a year.
House paid for, no other real debt but do have a HELOC which is due about 4 years from now. It’s an interest only arrangement but I’ve been paying much more than that regularly. Question on best way to handle paying it off without a ton of pain.

I’ve got the 401k that I could use; it should appreciate in value but will be a large taxable event at that point.
Could take a smaller sum from the 401k each year to lessen the taxes, bring down balance.
Could use the IRAs but that is money rec’d from an estate and I am very hesitant to go that direction.
We could sell the house, pay out of proceeds but we like it, got it to where we want it (that’s what the HELOC was for, A/C, roof, kitchen etc.)
Re-work the original HELOC into another one while I’m still employed?

New set of eyes would be appreciated.

If you’re keeping the house, I’d refi the HELOC. Maybe with another HELOC, maybe with another product. I’d talk to a mortgage lender about your best options along those lines.

-Rob

I'd speak with the lender. Your HELOC may, at the end of your Draw Period, simply convert to a standard payment loan, 180 months or so. Principal plus interest per month, with the interest calculated as it is now.

Put a mortgage on the house to pay off the heloc. Most likely the interest on the heloc will be prime plus one when a mortgage will be prime.

quote:

Originally posted by cheeze:
Put a mortgage on the house to pay off the heloc. Most likely the interest on the heloc will be prime plus one when a mortgage will be prime.

This, I would just get a mortgage, pay off the heloc, then pay the mortgage as fast as you want to.