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WahooKid

Joined: 8/14/98 Posts: 2725
Likes: 1530


A follow up ? to my earlier post re: mortgage brokers in Richmond


For the financial gurus out there, I'm trying to see if this makes financial sense to do.

So I'm about 4 and a half years into a 30 yr conventional mortgage. It was new construction when we financed, and we took a lending package from the builder that allowed us to bypass paying PMI since we were over the threshold. The downside to that was that the interest rate was a little higher at 4.625%.

We've got excellent credit, so the rate has always stuck in my craw a little bit. I thought that once we got the balance down to where PMI wouldn't be required, I'd look to refinance, get a better rate, and shorten the term some. So now my mortgage balance is about $300K and the house is worth about $380K-390K so all good on the PMI issue.

Now I'm rethinking this as we are not sure how long we'll stay in the house. My wife and I are about 5 years from retirement, so we feel pretty certain that we'll be in the house another 5-7 years, but we're not too sure what will happen after that, we may want to downsize at that point.

My goal by refinancing was to get a lower interest rate and shorten the term with the hope that we would be able to pay down the mortgage on the current home as much as possible so if we decided to downsize we could maximize our profit on the sale of the existing home and have more cash to put on our next house. Now I'm second-guessing myself and thinking that if I refi and start a new loan, even with a shorter term and better interest rate, I may not have enough time in 5-7 years to get the mortgage balance down like I want to since I'll be starting a new loan and most of my payments will end up going to interest.

So what say the Sabre financial experts? Does it make sense to refi now when I could end up selling the house in 5-7 years?

Posted: 06/17/2019 at 12:24PM



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