Splitting Up Your Mortgage: Wise or not?

A friend just emailed me a familiar scenario to check out. I've seen it done and heard brokers recommending it in the past. Just remember, if it sounds too good to be true, it probably is: Say you have a $700,000 mortgage now at 6.5%. A loan agent may recommend that you can save $500 per month by refinancing your first into a $417,000 first at, say, 6% and getting a 2nd mortgage for $300,000 at 4.5%. Wow. Saves you a gang!?? The Rub is that the 2nd is typically a line of credit with an Adjustable Rate. The "Pitch" is the lower fixed rate on the first mortgage and less emphasis on the potentially explosive Home Equity Line of Credit. PLUS you may be blowing a big mortgage interest tax write off as you can only write off up to $100,000 on a 2nd mortgage, leaving $200k's interest blowing in the breeze. Buyer Beware. I'll show you the right way home. Pat Townsley, Mortgage Broker to the stars. 415-485-1776, http://www.ptre.net/