to roll a higher debt into a lower interest rate, but you’re going to be too close to the bone on the other house. Financing more than 80% puts you into PMI territory. Plus there’s a risk of going underwater. You might be able to refinance one or both of those houses though, those rates sound really high.
MN doesn’t do that, just the $2800 closing costs. I thought it was bad enough that we’ll have to pay $475 to close the HELOC we never used in order to refi (we were considering buying a house with my SIL and BIL last year and wanted to be able to use our current house’s equity for a down payment and sell afterwards. Our housing costs would have plummeted afterwards because of shared costs, but we had no intention of using the HELOC unless we did that. I don’t lose too much to the Stupidity Tax, but that’s where I’m putting this one.)
with closing in a month. We have 26.5 years left on our 30 year current mortgage at 5.5%. With the interest rate drop, our monthly payment will only go up $10 but instead of $175 going towards principal monthly, it’ll be $375. The closing costs will be paid for in just over a year.
If you’re asking whether you should take cash out, I’m pretty sure Dave would be opposed.
We’re probably going to finish steps 4 and 5 this year, so I was planning on putting more money into the house anyway. I considered a 15 year at 3.25%, but the extra $140 would put us at more than 25% of our takehome pay. I crunched the numbers and if we put that extra $140 in monthly even while keeping the 20 year mortgage, it’ll be paid off in 16 years, so I figured it would be better to maintain the flexibility of the 20 year.