A home equity loan rate ain't no chump change charge you can just ignore! Take a look at two loans with a different home equity loan rate and you'll see like you looking out a gold eyeball!
How you gonna say that the home equity loan rate you pay on your upcoming home equity loan ain't gonna make no difference in your overall cost amount? Thats stupid talk! Thats the stuff that makes me mad and not want to even PITI the fool but grab the fool, pound on his spine for a bit and watch the tears flow out from his eyes! LIsten up sucka - I'm about to lay down some mathematics and bring some serious PAIN!
Lets say you have $80k in home equity, and you want to take out $50k of that to fix - I don't know - the weight room in your basement. One lender offers you a home equity loan rate of 8.5% without paying points and with the option of refinancing after the first five years of your loan term. The other lender offers you 8.0% after paying two points and without the option to refinance - which one saves you the most money and which is great greatest deal overall?
Example 1: that 8.5% home equity loan rate without points will charge you $492.37 every month for the next 15 years - assuming you never refinance into a lower home equity loan rate throughout the ocurse of yoru loan. This will result in a total payment of $88,626.56.
Example 2: you get a lowerhome equity loan rate, but you either have to pay that $1000 for your points now or incorporate them into the loan itself. Lets say you incorporate the points for a loan total of $51,000. You'll pay $487.38 every month for the next 15 years, for a total payment of $87728.86.
From the look of things you'll be saving about $900 by taking that lower home equity loan rate - but you a sucka chump and you ain't got no clue as to your overall financial obligations foo! If you can't be refinancing throughout the course of your loan you will be stuck - and when better home equity loan rates come along you can't refinance and you be a sucka foo then!
