Sooo, refi will cost me $7250 but net me a 1/2pct cheaper rate than my current 4%. Currently paying PMI as LTV is above 80%.
Goals would be
1. free up more monthly income w/o huge financial impact to realize longer term savings
2. gain more sunlight
Option1: Refi...
Con: We don't get more sun, I have to cut tree's down and build expensive patio, pay for misquito control and addtl lawn costs to keep said area clean and bug free while still living in the northwoods to get SOME more sun, likely never enough sun with way home is on lot and the way earth rotates on axis. Backyard is north, front southern exposure which DWhates.
Con: immediate cost of $7,250 closing fees
Con: I have to educate DW on an amortization schedule to show her the savings$$
Pro: Lower int rt by .05 netting $552.36/annually
Pro: Eliminate PMI (assuming appraisal comes back with today's ++ market value) netting $15831.5625 which we would end up paying over next 6yrs until LTV at 80%
Pro: don't have to move a single box
Option2: Sell and Move into a smaller monthly payment...
Con: We pay the fees and equity hounds on the closing costs when we buy back in a sunnier home, but
Pro: DW is happy, because she is tan, because she gets more sun in her life.
Pro: We capture some equity and market gains > $104k (if we sell for our list), and somehow leverage into a smaller more affordable monthly payment
Pro: Eliminate PMI on next home since the equity capture of the sell will be large enough
Pro: could get into a better school district
at first glance, the pay to play refi with equity sharks getting $7250 looks like the best option. We pay $7250 now to net the difference of that and $15831.5625 over that 6yrs we would have been paying it...plus the extra savings on the interest rate over that six years...which means we could in the next six years, double-down and cram an extra 12033.8125 into the mortgage the first 6yrs of the term. Since our monthly payment would be $504 cheaper...we could also plan to put that towards the home on top of our already extra $500/mon we do... and in months that are tight just dial back the extra principle payments. Jeez...now that my amrtz schedule is taking shape I think I talked myself into my answer...anyone violently object?
12033.8125 = Xtra Prin from eliminating PMI over 6yrs
36266.160000024 = Xtra Prin from Lower payment over 6yrs
36,000 = Current Xtra Prin Payment
New amrtz = $1170.832951389 of extra principle a month.
in 3yrs xtra prin will increase to $1871.832951389 ($701/mon auto loans end)
I figure we can rock our cars for 6yrs without another payment...and by then we will likely be millionaires and won't need that little loan help.
EDIT: It looks like selling could still be a better long term option... I ran both the current ammortization path we are on vs this new one and it would net us $60k and 2yrs of early payoff...however, if we sell for our list at $104k net, the difference of 40k would be partly to the equity hounds and partly to our short tern rent situation. if we had zero rent expenses and we landed minimal closing costs...selling might still be the more attractive offer in terms of ROI. Granted we are buying in the same high market we are selling hmmmm.
Goals would be
1. free up more monthly income w/o huge financial impact to realize longer term savings
2. gain more sunlight
Option1: Refi...
Con: We don't get more sun, I have to cut tree's down and build expensive patio, pay for misquito control and addtl lawn costs to keep said area clean and bug free while still living in the northwoods to get SOME more sun, likely never enough sun with way home is on lot and the way earth rotates on axis. Backyard is north, front southern exposure which DWhates.
Con: immediate cost of $7,250 closing fees
Con: I have to educate DW on an amortization schedule to show her the savings$$
Pro: Lower int rt by .05 netting $552.36/annually
Pro: Eliminate PMI (assuming appraisal comes back with today's ++ market value) netting $15831.5625 which we would end up paying over next 6yrs until LTV at 80%
Pro: don't have to move a single box
Option2: Sell and Move into a smaller monthly payment...
Con: We pay the fees and equity hounds on the closing costs when we buy back in a sunnier home, but
Pro: DW is happy, because she is tan, because she gets more sun in her life.
Pro: We capture some equity and market gains > $104k (if we sell for our list), and somehow leverage into a smaller more affordable monthly payment
Pro: Eliminate PMI on next home since the equity capture of the sell will be large enough
Pro: could get into a better school district
at first glance, the pay to play refi with equity sharks getting $7250 looks like the best option. We pay $7250 now to net the difference of that and $15831.5625 over that 6yrs we would have been paying it...plus the extra savings on the interest rate over that six years...which means we could in the next six years, double-down and cram an extra 12033.8125 into the mortgage the first 6yrs of the term. Since our monthly payment would be $504 cheaper...we could also plan to put that towards the home on top of our already extra $500/mon we do... and in months that are tight just dial back the extra principle payments. Jeez...now that my amrtz schedule is taking shape I think I talked myself into my answer...anyone violently object?
12033.8125 = Xtra Prin from eliminating PMI over 6yrs
36266.160000024 = Xtra Prin from Lower payment over 6yrs
36,000 = Current Xtra Prin Payment
New amrtz = $1170.832951389 of extra principle a month.
in 3yrs xtra prin will increase to $1871.832951389 ($701/mon auto loans end)
I figure we can rock our cars for 6yrs without another payment...and by then we will likely be millionaires and won't need that little loan help.
EDIT: It looks like selling could still be a better long term option... I ran both the current ammortization path we are on vs this new one and it would net us $60k and 2yrs of early payoff...however, if we sell for our list at $104k net, the difference of 40k would be partly to the equity hounds and partly to our short tern rent situation. if we had zero rent expenses and we landed minimal closing costs...selling might still be the more attractive offer in terms of ROI. Granted we are buying in the same high market we are selling hmmmm.
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