Only you can decide what the right scenario is. Your gut will usually steer you in the proper direction. I can only tell you how free my husband and I feel right now without any loans on our property. No one can take it away from us if times get really sour. Naturally, you still have taxes, insurance, and upkeep, but building a reasonable home takes the pressure off of that. We look at our land and feel thrilled that it is truly ours. As long as someone has a loan on their home or land, they do not own it, the bank does. Try missing a payment or two if disaster strikes and see what happens. Disaster can be a major unexpected illness or accident, natural disaster in an area, or economy based. Was it a hassle to sell a house while living in it? For sure! I hated that process. (Fortunately, we sold in under a year). We decided the short term nuisance of selling while in the house was still better than owing a bank for more money. The interim of not being in my new home yet is difficult at times. I'm in a small place in the meantime. I'll admit, I'm spoiled and want it now. However, in the home scheme of things, it's only a short term inconvenience, and then I'll be through with construction and in my home. And I do have a decent roof over my head in the meantime. Also totally ours. As far as construction loans go, yes, they are given out in draws, but we had been locked into an interest rate that was good for the life of the construction loan, and grandfathered into the mortgage itself. However, the way the banks are now, that may no longer be the case. Keep in mind that a lot of banks will not let you be the owner/contractor, but it doesn't sound like that is the way you want to go anyway. Now the issue about equity loans. They are hard to come by these days, even with a perfect credit score. I have a friend who is vice president of a bank. She said that they have had many people borrow against a home they are currently in, and no longer wanted. Of coarse, they never tell the bank they no longer want the home. They say they want to make improvements, or whatever. With the real estate market what it is, it can take time to sell. So, they are buying another home with the equity money and letting the bank foreclose on the one that was no longer wanted. This has made getting home equity loans harder to get than hens teeth, and hurts the honest people. You may also find it very difficult to get the equity loan processed, funds dispersed, and a new home totally constructed ready to move in, within a year. Even with a reputable builder, homes are seldom done in the exact time frame we want. The banks are approving loans, setting closing dates, and then either pulling the plug for some lame excuse three days before closing, or re-setting closing dates over and over, due to "needing more papers filed" that come out of nowhere. Good luck in whatever decision you make. It's never an easy one, and I wish you the best.

Do you really think an additional $20 a month will shave off 5yrs from my large balance? I don't pay MIP, our appraisal is $540K so we have alot of equity. But I did do something recently, I have consolidated our automobile, and I paid it off and a credit card(the only one we had) and I will be paying $800 a month to pay it off in about 30-35ms. I was thinking when its paid off (not telling my husband right away) cause he will find ways to spend it, but I was thinking I could try( for a few mos if I can) pay the $800 extra principle on our mtg, but anything can happen from now until then and really that is just dreaming. I am on a very tight budget so that I CAN pay extra anyway I can to pay things off, crazy but I would rather pay more on my bills and try to skimp on food at the grocery store. But Steve I will look into the diff of $20 or so that you mentioned, I might be getting a raise soon, so that might be a possibility. And luann if your out there, I would still like to hear from you! Thanks!

It is really hard to decide; my rule of thumb has always been, which will require the least out of my pocket in the long run? Without doing all kinds of calculations (that I can't do, but I believe that there are websites that can calculate it for you) I can't say for sure. There are advantages to the fixed rate refi, especially lowering the interest rate on your original balance; but could you get a lower rate and less out of pocket from a HELOC, paying it off first with the same discipline that you have been using? Have you talked to a credit union? I did take out a HELOC from my local credit union in order to pay off my mom's condo loan; there were no closing costs, fees, etc and the lowest interest rate in town. That was before the crash -- and it was long ago paid off, so I don't know if such a good deal might still be available. Don't know what repairs you need, but some large companies (hvac, roofing, siding) will offer low cost financing too -- you have to read the contract very carefully to be sure that you are getting what was promised.

It's simpler than you think. Just use a regular mortgage calculator, plug in the amount remaining on your morrgage, today's date, and your interest rate. For the term of the mortgage, just use the number of months remaining until the day you would like to have it paid off. Then calculate the payment, subtrate from that your current payment, and the result will be the extra amount you need to add to each payment.