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Should I do Choice A or B?
I have pruchased my partner's share of the house I live in. I plan to
stay in the house for 5 years and then sell.
A) Assume my current mortgage for $1,700/mos. and then re-fi in 3
years when the fixed rate expires.. Cost of assuming morrgage = $1,000
now, + $3,000 in 3 years when I have to re-fi.
B) Re-Fi now at a rate I locked last month for $1,800 / mos for the
entire 5 years. Cost of Re-Fi = $3,000 now.
It is tempting to Assume the loan and save $2K for now, plus 100/ mos.
for 3 years. However, I would have to pay the 3K to re-fi in 3 years
from now anyway, and the rates might be a lot higher - negating the
monthly savings in the first 3 years. On the other hand, I might
consider the interest earned on saving the 1st 3 years, plus the
additional tax right off this year for the closing costs and
additional inteest paid on the mortgage.
Thanks, |
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