Smart way to Refinance 3 yo home to borrow money?

Question

Hey guys!

We bought our first home in Feb of 2008 and are wanting to do a refinance around May of 2011. My partner is becoming a Teacher and we will be going 6-8 months with minimal income while she does her student training.

Which will be better to do:

Refinance our home and borrow enough to pay off any remaining bills and have money to live on during those 6-8 months

OR

Doing a Home Equity line of credit to pay off any remaining bills and live off of for 6-8 months?

I know this is well into the future but we want to make sure we have a game plan. We've already paid off both of our cars, have one credit card remaining that will be paid off in January, have a Scooter almost paid for and are working on getting my Harley paid off in 1 year instead of 6. Soooooooooo, any help would be appreciated!

Answer 1

FHA good Neighbor next door if you have any equity in the home --it is  anew teachers program

Answer 2

Any advice you get will be very iffy--make that VERY iffy. You are asking about three years into the future and that makes any advice very iffy....oops, make that VERY iffy. In three years (assuming minimal appreciation) will affect how much equity you will qualify for. A refi will generally cost you in fees. I would lean towards a equity line for cheaper costs, but overall, i'd suggest a third plan--save a hundred bucks a month (and DON'T spend it) to build up a nest egg so when your partner does the 6-8 months student training you will have some money to live on. Additionally, you do not say whether you are employed or not (you should be) so knowing whats ahead, you have plenty of time to decide what you will face in the future. If you have a scooter AND a harley, get those paid off as soon as possible, don't take on any new debt, if at all possible, be thrifty, and avoid the costly choices of either a HELOC or a refi. Good luck.