I’d really appreciate your thoughts here.
I have a house that has $275K in loan. Market value is $300K. I plan to sell and relocate in a year because with the average rent in my area, I’d be renting this at a loss.
I'm getting offers of 2.875% APR, and my current APR is 3.875. I'll be saving about $200 a month if I refinance, but my loan will jump up to 280K and I'm afraid of selling at a loss.
What do you think? Should I refinance or keep the same APR?
So you’ll save $2,400 for the year, but loan is $5k higher? I’m assuming that’s because you’re rolling refinance into cost of loan. That’s a negative $2,600 for the year. Bad plan.
The total cost of the refinance would probably not offset the limited savings for a year People are usually surprised how high closing costs actually come out to be. Usually a good refinance you plan to recoup your costs over a 3-4 year period . That would be a no since you are only staying 1 year .
If you know you are going to sell it I would not refinance. The closing costs would outweigh the monthly savings.
Why are you waiting to sell it?
why don't you sell it now Instead of operating at a loss for 12 more months?
@Erik B. I’m living in the house for another year before I relocate. If I keep the house and rent it out, it’ll be at a loss that’s why I’m planning on selling it by that time.
Don’t refinance it. You’ll get raked over with points, closing costs etc. it’s not worth it if you’re going to sell it that soon. Take a loss each month and sell it in a year when you’re ready. Who knows, maybe average rent in your area will go up and make it worthwhile to keep as a rental if you can at least break even.
I think just stay as is, I assume the loan is not maturing any time soon?
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