Haven’t made up my mind to sell or rent it, but I’m ready to move on to something else. I've never owned rental property, but for the moment, I not asking about the merits of doing it. I know that’s been discussed here before.
So assuming I’m going to convert it in the near future, I’m considering the merits of refinancing first. I assume refinancing now would be easier than later. Plus rates seem projected to start going up.
I’m pretty up to speed on the factors to consider in the general case, but could use some other opinions taking into account it would be a rental property before long. If I were to stay in the home there would be no real advantage to do it given current rates and my financial position.
I’ve examined the numbers and if I refinance, the only thing I’d really gain would be lowering my monthly obligation…
Current: $102K, $780/ month (pmt+interest) interest at ~$400 right now. 187 months left.
Refi: $105K, $505/month, interest starting out at ~$350. Start over at 360 months. (Refi costs rolled in)
I’ve actually been paying extra principle designed to have it paid off in 8.5 more years. This brings my monthly PI+Extra to ~1200. In either case above, it would still be $1200/mo to finish in ~8.5 years but obviously I may discontinue this strategy if it’s a rental.
Having a lower monthly obligation would seem to be an advantage. Also, I know you can’t count your whole mortgage payment as an expense, but you can expense the mortgage interest right?
The clear disadvantage is I’ve borrowed an extra ~$3K to refinance, which would hurt if I ultimately changed my mind and decided to sell it soon.
Sorry for the long-windedness, but I would appreciate any feedback from those of you who have better insight.
So assuming I’m going to convert it in the near future, I’m considering the merits of refinancing first. I assume refinancing now would be easier than later. Plus rates seem projected to start going up.
I’m pretty up to speed on the factors to consider in the general case, but could use some other opinions taking into account it would be a rental property before long. If I were to stay in the home there would be no real advantage to do it given current rates and my financial position.
I’ve examined the numbers and if I refinance, the only thing I’d really gain would be lowering my monthly obligation…
Current: $102K, $780/ month (pmt+interest) interest at ~$400 right now. 187 months left.
Refi: $105K, $505/month, interest starting out at ~$350. Start over at 360 months. (Refi costs rolled in)
I’ve actually been paying extra principle designed to have it paid off in 8.5 more years. This brings my monthly PI+Extra to ~1200. In either case above, it would still be $1200/mo to finish in ~8.5 years but obviously I may discontinue this strategy if it’s a rental.
Having a lower monthly obligation would seem to be an advantage. Also, I know you can’t count your whole mortgage payment as an expense, but you can expense the mortgage interest right?
The clear disadvantage is I’ve borrowed an extra ~$3K to refinance, which would hurt if I ultimately changed my mind and decided to sell it soon.
Sorry for the long-windedness, but I would appreciate any feedback from those of you who have better insight.