CountryBoy19
Grandmaster
Ok here is the situation:
I'm currently 2 years into a 30 yr mortgage at 5.75% fixed. Not the best rate, but it was a USDA loan that didn't require a down payment. That allowed me to buy a house sooner rather than wait until I had the down payment saved back.
Principal owed currently $170,000
Appraisal at time of purchase was $175,000 but I think they just gave it a conservative number because that was sufficient to satisfy the lender on the mortgage. The assessed value is $236,500.
My situation:
I anticipate a large income (more than double what I'm making right now) in the next year, with the high likelihood that I can continue that high income for at least another 3-4 years. That is not guaranteed, however. If something happens to me and I can't work that income opportunity will go away.
My wife and I live on a "healthy" income but it's not "wealthy" by any means.
My thoughts are to refinance to a 5/1 or 7/1 arm. I know arms are typically frowned upon. But with our currently expected income situation, with a 5/1 or 7/1 arm we can totally pay off the mortgage in less than 3 years. That would be before the rate even had a chance to change. I've been doing a bit of shopping around and you can get 5/1 or 7/1 arms down under 3% now. It seems like a no-brainer deal to me to refi to a low rate arm and pay off the mortgage before the rate even has a chance to change. Worst case scenario, if something does happen, our income can still comfortably pay the normal mortgage payment without causing too many ripples in our personal life (that even includes a healthy cushion if we can get it paid before the rate adjustment and the rate takes a drastic jump).
What does the hive think? If I refi right now I have to be able to finalize and close it within 1 month and absolutely NO LATER than that. If I don't refi now, I will have to wait 6 months before I can refi.
Advice? Suggestions?
I'm currently 2 years into a 30 yr mortgage at 5.75% fixed. Not the best rate, but it was a USDA loan that didn't require a down payment. That allowed me to buy a house sooner rather than wait until I had the down payment saved back.
Principal owed currently $170,000
Appraisal at time of purchase was $175,000 but I think they just gave it a conservative number because that was sufficient to satisfy the lender on the mortgage. The assessed value is $236,500.
My situation:
I anticipate a large income (more than double what I'm making right now) in the next year, with the high likelihood that I can continue that high income for at least another 3-4 years. That is not guaranteed, however. If something happens to me and I can't work that income opportunity will go away.
My wife and I live on a "healthy" income but it's not "wealthy" by any means.
My thoughts are to refinance to a 5/1 or 7/1 arm. I know arms are typically frowned upon. But with our currently expected income situation, with a 5/1 or 7/1 arm we can totally pay off the mortgage in less than 3 years. That would be before the rate even had a chance to change. I've been doing a bit of shopping around and you can get 5/1 or 7/1 arms down under 3% now. It seems like a no-brainer deal to me to refi to a low rate arm and pay off the mortgage before the rate even has a chance to change. Worst case scenario, if something does happen, our income can still comfortably pay the normal mortgage payment without causing too many ripples in our personal life (that even includes a healthy cushion if we can get it paid before the rate adjustment and the rate takes a drastic jump).
What does the hive think? If I refi right now I have to be able to finalize and close it within 1 month and absolutely NO LATER than that. If I don't refi now, I will have to wait 6 months before I can refi.
Advice? Suggestions?