Every Monday Morning at 8:15am, join me on my Facebook page as I sit down with a local lender, and do a live interview and talk about a Mortgage Tip that may help YOU with your next Real Estate Purchase. 

This morning I sat down with Barb Adelaine from BankStar. Listen as she explains whether or not you should pay off your house in lieu of other loans.  You can reach Barb at 605.696.8562 or barb.adelaine@bankstar.com.  Her office is located at 1301 6th St., Brookings SD 57006 or on the web at www.ebankstar.com 

Should You Pay off Your Home Loan if You Have Other Loans?

- Hi good morning everybody, Shane here from the Brookings Home Team powered by Century 21. And it's a cold, cold Monday mornin' but that didn't start Barb and I here. We're here for our Monday Morning Mortgage Tip. And thank you for watching again on this cold day and as always I'll have Barb's information on the top, on the bottom, on the sides. Wherever your device allows you to see that. But we were talkin' a little bit about refinancing and paying off your house and we've had a few questions on that here lately and thought let's just talk about that a little bit today. So thanks for braving--

- You're welcome.

- The chilly weather. And what do you have to talk about today then on that part?

- When people do ask should they pay off their house in lieu of paying off student loans or other debt, the common consensus is because you may have a tax deduction in the interest that you pay on the house that you pay the other things off first. I've also had some business with people who are about to retire, they've got their house paid down pretty well and they wonder before they get into a fixed income should they pay off their loan? Some people would think that maybe it would be better if you know you're going to have adequate cash flow to continue the payment and keep your cash so that you have it on hand for emergencies or other things you'll continue tax deduction for a while until your house payment gets so little that maybe that won't work anymore. But if you have cash in reserve that you could pay off if you changed your mind later, you might wanna hang onto it. So we're suggesting that people continue their payments.

- Okay, so as far as refinancing then, let's say that somebody comes in and talks to you and they're at a five percent and the rate is at either four, four and a half or even lower. Obviously it depends on where the rate's at. What would you recommend them doing? Is there a line where they draw to refi?

- I usually recommend that there should be about one percent difference between the rate that you have and if you're looking for a lower rate what the new rate is. So if you were at five and we could offer you a four, that would probably be a good time to pencil that out. If there's only a half, we could sure take a look at that too, sometimes if you need to take cash out that's still a pretty good rate. If you are one of the lucky ones that has a three percent rate and rates are pushing five right now, then you probably don't wanna refinance the balance of the great rate you already have but you might wanna look at a home equity loan especially if you're looking at consolidating other debt that's at a higher interest rate and maybe you have some cash need. A new vehicle or something like that and the house might work better than a car loan although you need to really compare those things.

- Yeah and Barb's a good resource for that so she'd be happy to talk to you a little bit more on--excuse me--if that would be a good move for you there or not. Yeah when you, and I had an equity line at one point where I was able to purchase items and stuff like that, maybe not bigger items. In my situation I was able to write that interest off because it was tied to my house. So some good information.

- Yeah, another thing you might wanna compare if you're looking at that is the difference between lines of credit and a regular second mortgage which is paid back just like your first in monthly payments sort of like a car loan. Sometimes there's a rate difference there. Sometimes those open lines of credit can change quickly, like a credit card, right?

- Yeah, good news, or good information. All right so there you have it, that's today's Monday Morning Mortgage Tip. Feel free to contact Barb or myself if you have any questions, we'd be happy to answer 'em here or on our next episode. Again I'll have all of our information in this post here for you to reach out to her. Feel free to give her a call at any time and she'd be happy to talk to you there too. And as always feel free to share or tag anybody that you feel would benefit from this video and hopefully we can help them out as well. So thanks Barb.

- Super, stay warm out there!

- Stay warm and we'll be back next Monday guys. Have a great week, we'll see you.

- Goodbye.

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