Looking to refi in a 80/20 currently

Purchased a home only a few months ago. Loan is $200,000. 80% $160,000 @ 5.65% and 20% $40,000 equity line interest only at 7.37%. Home value is appraisable at $225,000.

Looking to do some upgrades to the home. Income/Debt is 25% or less and credit 750+

What do you recommend?

With your good credit, get a HELOC to take out the second and go to 100% or even 125% of value.

I am a new home owner so take it easy on me.

What is a HELCO?

I’m already at 100% aren’t I with a 80/20?

You haven’t said how long you’re going to be in the house. If you’re selling in the next five years or less, there may be better options than a large second mortgage or home equity line. I think it’s smart to hang onto that first mortgage if you’re in for the long haul, but a 100% first with a 25% second may actually save you more money. You should check out both options. – Rick

If the house appraises at 225 then you have 25k in equity. The cheapest way to get the money out is to refinance the second mortgage and pull up to 25k on top of your 40k that you have now. A good broker will get you a no closing cost refi on the 2nd.

Thank you for all of the tips. I have been in the house for only 3 months. So I have to wait until 6 months before putting the 25k on top of the 40k. What would be a decent rate today? Would you go 30 year fixed on the 2nd or star with interest only? Also I don’t under stand the 100% + 25% reply earlier…