What Equity? You Owe 100% On The Property

Q: immediately take out a Home Equity Loan against my property as soon as I close and pay off my car and use the rest to pay off the variable rate credit line in my portfolio. what equity? You owe 100% on the property.

A: I am getting ready to close on a house in the next several weeks, and I am exploring my options afterwards to place myself in the best long term financial picture. I have no credit card debt, about 4000.00 left on a vehicle - 2 years, 7.5% auto loan. No other debt at all. I am taking a loan out for 76,000 on a 95,000 home on a 30 year 6.5 fixed. I am putting down 20% using a variable credit line against my portfolio - currently prime + 3 spread through UBS PaineWebber. I am thinking that perhaps what might be a good idea is to immediately take out a Home Equity Loan against my property as soon as I close and pay off my car and use the rest to pay off the variable rate credit line in my portfolio. That way I am protected against the rates rising in my credit portfolio through a 10 year fixed loan for at least half the amount plus I will no longer have a 202.00 a month payment on my vehicle, so I can pay that amount towards the variable rate credit line until it's back at a zero balance, and then I will simply have the 76,000 at 6.5/30 and the 10,000 at (I am thinking 7.5/10).

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