What's the best option? HELOC vs Refinance vs 401K loan

[Bebzmle]

Hello,
Not sure if I'm posting this in the right forum, but I want to ask your opinions based on your experiences. I need $10K emergency money and I'm trying to figure out which one is the best option. My mortgage is current and my home has increased in value at least $50K for the last 3 years. Rate of my mortgage is 4%. I'm planning to pay back this 10K within 2 years. Which option is best? Thanks in advance.

 

[Erik Sandstrom]

You're absolutely asking this in the right forum. For 10K I think the options I would look at would be in this order for me personally:

1. 401K loan - no matter the rate of interest that you borrow you're still paying it back to yourself vs a bank.
2. HELOC if you qualify - HELOCS require a significant amount of equity and usually perfect credit
3. Refinance - There aren't enough details of what you have mentioned above to give you an idea of what you would be looking at but feel free to shoot me an e-mail at: [email protected] and I can go over a few options with you.

As you can see I put option #3 and myself helping you last, I would never direct someone in a route that I personally wouldn't take. You can also give me a call at 619-379-8999 if you have any other questions.

 

[Bebzmle]

Erik,
Thank you for your candor in this matter. I will borrow from my 401K. You're absolutely right--I'd much rather pay back to myself instead of the bank. Again, thank you!!

 

[Erik Sandstrom]

Very welcome, don't forget about me if you have any friends or family that need help. I lend in all 50 states