5/30 interest only Home Equity Loan question

 My lender is promoting taking a fixed 30 yr on 80% of my new home.  He
also suggests taking a 2nd for 25K (best rate threshold) and that one
would be a 5/30 Home Equity Loan that is interest only.  My down
payment would be about 35K so I do have some dollars in the place.


I don't know a lot about this setup but am interested in hearing
people's opinions..

  "My lender is promoting taking a fixed 30 yr on 80% of my new home.  He

also suggests taking a 2nd for 25K (best rate threshold) and that one
would be a 5/30 Home Equity Loan that is interest only.  My down
payment would be about 35K so I do have some dollars in the place. "


I guess lenders didn't learn much from the savings and loan bust during
the last real state boom two decades ago, did they?

 My lender's learning curvae aside, what are your thoughts from my
perspective?

Is having to re-fi an interest only Home Equity Loan in 5 years a
hugely problematic issue (assuming rates are consistent)?  I think I'll
probably pay down that 25K to about 10 by that time so I would only be
re-fi'ing 10 and not 25K...

 briansbarry@gmail.com wrote:

So what's his reasoning?   Taking out a second mortgage or a HEL is a fairly
standard way of avoiding having to pay (non tax deduct able) mortgage insurance.
However, I'd think that doing an interest-only HEL would sort've negate a lot of
the advantage, since it sort've assumes that you'll be refinancing the whole
shmoo in five years (or selling out by then).      Personally, I think there are
enough inflationary pressures on the current US economy that I wouldn't want to
be on home loan rates being any where near as low in five years as they are now
(but, hey, if I could see into the future, I'd be rich).