“I always appreciate these kinds of Questions”

“I always appreciate these kinds of Questions”




I am guessing that you have done this calculation so many times that you know the answer off the top of your head. A client of mine asked my advice, what should I tell him? He has already been advised to refinance, but if you agree I will send him your way.


Homeowner has a 30 year mortgage that is in its 15th year at 4.25%.  They want to borrow another $100,000.  Current balance on first is around $290,000 and FMV is estimated be well over $600,000. 


Homeowner may move in 3-5 years, but is unlikely to move in less than 24 months.  They were looking to add a HELOC.  I thought that refinancing to a rate below 4% would be cheaper.  But then the question was raised, is it worth paying extra points to bring the rate down ever further.  My guess was that the extra points to buy down the rate would not make sense with less than a 5 year window.  


Refinancing for a client in this situation would be crazy. Spending the money for closing costs for such a short time period would make NO sense.


I recommended that the client arrange for a home equity line for the funds that are needed and there would be no closing costs. One additional benefit is that 15 years into a 30 year mortgage means lots of principal pay down with each additional mortgage payment that is being made.


What advice would you have given?


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 2 commentsJoe Petrowsky • July 25 2017 08:05PM


I would have advised them to speak with my lending professional to run the numbers.  However, on the surface, 15 years in, at 4.25%, with a sale in 3-5 years, a refinance does not make sense.

Posted by Kathleen Daniels, San Jose Homes for Sale-Probate & Trust Specialist (KD Realty - 408.972.1822) over 1 year ago

I would defer to your judgement but I would agree with your assessment.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 1 year ago