To ReFi or not to ReFi?
August 27, 2010 9:07 AM Subscribe
Is it smart to refinance my house now? Very Special Snowflake details on the other side.
posted by anonymous to Home & Garden (6 answers total) 1 user marked this as a favorite
I own a 3 bedroom, 1.5 bath home on a double lot in a popular, but not upscale, neighborhood in central Denver. I bought it two years ago and paid $288k for it. I have a 5.75% 30 year fixed rate loan on which I owe just over $267k. With taxes, interest, PMI and all my payment is currently $1935/mo. I've a quote/GFE that indicates that I would have a new payment right about $1600/mo and according to my math my break even point is about 18 months.
I am considering a move to another state to be with my significant other. Under normal circumstances I'd ask SO to move here, but there's a pitbull involved and Denver has a very strict pitbull ban. While I feel pretty solid in this relationship (we're talking about getting married) I know all too well that anything can happen. This and the fact that sales in my area have slowed significantly and prices are down has me considering refinancing the house and renting it out.
Without refinancing I would find it difficult to rent it out at a rate that makes it cash flow positive, or even neutral. At $1600 I think I could. If the relationship works out I could sell the house down the road or I could maintain it as a (very) long term investment. If the relationship doesn't I'd have a home to come back to (after whatever lease is in place at the time expires).
I'd appreciate some unbiased feedback on this. Throwaway address: AskmeRefi@gmail.com