Please help!
Dear All,
My family is trying to make the best out of a situation that we are currently in. We live in Southern California and have a rental property which rents about 2k per month, after paying the mortgage (about 1028 dollars/per month, with 196K left at 4.65% rate for 30 years), we are able to keep 800 dollars. The renter is in our house for about 1.5 years. A couple week ago, my tax man advised us to sell the rental property before 5 years period, so our profit won't get taxed (ours is 15% bracket). So we plan to sell the house in about 2 or 3 years, take those money and pay off our primary residence which owes about 260K at a 3.5% rate.
We were thinking about refi the rental property to a 5 year ARM, I called around and got the best rate at 3.625 with about 5000 dollars cost of closing cost with us bank and a payment of 868 dollars a month. If we go with this route, we are able to keep extra money in our pockets, but it is not a good way either (extra money is used to pay for the closing cost). Others gave me 4% with a cost of 3000 dollars.
We had lived in our rental property for 15 years and don't want to pay extra tax.
What do you suggest us to do? Should we keep the rental?
Any suggestions are welcome. Thanks you all for reading and suggesting.