home equity line of credit or refinance

Paying for College
1

<p>Oh wise and all knowing CC community we seek your advice. We are looking at paying close to 120K over the next 4 years for college expenses. Unfortunately our income is just enough to eliminate FA. Tapping into our home equity is our only option to send DC to dream school. We have over 500K in equity in a strong real estate market. We are about 6 years away from paying off existing mortgage of around 80K. </p>

<p>We are seeking advice on whether is is better to take home equity line of credit with interest (4-5.5% currently) rates based on payback interval 5, 10, 15 years when money is drawn and take out the 25 -30K each year to pay for tuition or take advantage of low 3.49 % rate of 10 yr mortgage and refinance current mortgage plus college expenses ( ~ 200K) . The refi would leave us with 80K to invest or put into 529 until needed in sophomore - senior years. Anything left after 4 years would be used to pay down mortgage.</p>

2

<p>I wouldn’t suggest to borrow into the house to finance a dream school.<br>
But if I have to choose between the two, I might go with refinance for 3.49% providing it’s a fix 10yr mortgage. Home equity line is adjustable with prime-rate, once these recent years’ low interest rate end when the economy turns around (when will that happen anyway?), you might face a higher rate than 4~5.5%.</p>