cube_rat
Thinks s/he gets paid by the post
- Joined
- Jul 12, 2005
- Messages
- 1,466
Please poke holes in my plan and/or provide some sane advice to wantabe FIRE person:
We just re-fied from an adjustable to a 7 year fixed. The 7 year fixed is at a respectable rate of 5.62% which caps out at 10.62% cap after 7 years. The loan balance is $390k (I had to absorb 6K in prepayment penalties from World Savings into the loan). My plan is to pay the interest only portion and save $1500 a month to an ING account for a period of 84 months. At the end of the loan term, I should have around $126,000 (not including componded interest) to paydown the principal to either re-fi again or stay with the new adjusted rate.
My rationale is this: Interest rates are trending upwards which will drive the savings rates up. I can take full advantage of a yearly tax write off in the amount of $21,924 per year for seven years not including property taxes. The downside is that I suspect I will probably pay more in interest in the long run by going by my plan. I haven't done the full computation yet.
Poke away....
TIA
We just re-fied from an adjustable to a 7 year fixed. The 7 year fixed is at a respectable rate of 5.62% which caps out at 10.62% cap after 7 years. The loan balance is $390k (I had to absorb 6K in prepayment penalties from World Savings into the loan). My plan is to pay the interest only portion and save $1500 a month to an ING account for a period of 84 months. At the end of the loan term, I should have around $126,000 (not including componded interest) to paydown the principal to either re-fi again or stay with the new adjusted rate.
My rationale is this: Interest rates are trending upwards which will drive the savings rates up. I can take full advantage of a yearly tax write off in the amount of $21,924 per year for seven years not including property taxes. The downside is that I suspect I will probably pay more in interest in the long run by going by my plan. I haven't done the full computation yet.
Poke away....
TIA