Plan to pay FHA Loan down Quickly.. Pros/Cons?
My fiancee and I are looking to buy our first property, a duplex, and will house-hack it. We are buying with an FHA loan, so we'll have PMI included.
She only wants to live there for a maximum of 3 years, but since we're buying it as a buy-and-hold rental, our equity will only grow so fast. I think by only paying the mortgage, it would be year 7 before we built 20% equity. I calculated that if we could pay $300 on top of the mortgage each month, we could have enough equity built up by year 2-3 to refinance out of the FHA loan to a conventional loan.
Key Factors... 30 year mortgage, 4.25% interest rate
I'm still thinking about getting a 15yr fixed rate, payment would just be higher, but mandatory as well
So, I have a couple questions.
1. Is there an easier way to refinance from an FHA loan?
2. What are some of the pros and cons of throwing all that extra moolah on top of the mortgage payment?