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Refi or pay off mortgage with cash
Old 05-28-2012, 06:21 AM   #1
Dryer sheet wannabe
Join Date: Nov 2007
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Refi or pay off mortgage with cash

I'm 55 and my girlfriend and I have split up and we have joint ownership of the house. House was purchased around 10 years ago for 210,000. I think the current value is around 180,000 (after putting tons of improvements into it, but that's another story). She has choosen to live in another town and I need to stay in this town for probaby a year (before I retire) or maybe more. My question regards whether to refinance the house (I'd do a 10 year @ 3.12) or pay it off in cash (I recently liquidated 200,000 in mutual funds) and pay off my ex for her intrest. To further complicate the matter I'm not sure if I want to stay in this state after I retire. If I do stay in the state it would be in a town 45 minutes away from this house so I could oversee it as rental property. No matter where I end up living I plan on putting the fixed income portion of my portfolio into a couple of rental houses instead of bonds. The current interest rate on the house is about 5.87 so I'm really thowing money out the window right now. If I do decide to refinance I'd like rent it out and hold it at least until the loan is paid off before selling the property. Maybe by then the bond market will have nomalized.
Anyway I'd appreciated any advice/suggestions


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Old 05-28-2012, 07:32 AM   #2
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You'll find multiple threads here on this very subject; suggest you investigate those. From a personal POV, I was recently faced with a similar choice (pay off Mtge or not) and I chose to pay it and retain the property (a rental) for income purposes. However, you will find other POVs on the referenced threads. One thing for sure, you can find a better Mtge rate.

Best of luck.

You may be whatever you resolve to be.

100% x 10% > 10% x 100%
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Old 05-28-2012, 12:13 PM   #3
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Seems like you won't be there long. I'd think about selling it and renting. Clears up the house value if you and ex still have an interest in it. No big loan, no ties when you're ready to move in a year. On the downside, you'd have to move, though that is coming soon anyway.
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Old 05-29-2012, 04:24 AM   #4
Dryer sheet wannabe
Join Date: Nov 2007
Posts: 17
Thanks for the replies.

I'll try some different search terms and see what I can come up with.

I have considered the sell and rent idea but I'd have to move twice and that's a big job.

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