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Would you refinance?
DH and I had our house for sale last year for six months, but then took it off the market as it was time for baby #3.
We have completely outgrown the house as a family of five, and we are going to put it on the market again. However, if it doesn't sell, we are considering renting it out.
We currently pay what I think would be high for its rental. Maybe I am underestimating myself. I would obviously ask a real estate professional. However, if we refinance now, we would save almost $200/month in payments and make renting it out more realistic.
The mortgage company told us the refinance would pay for itself in about 6 months. Would you go ahead and refinance, and then put the house on the market? If it sells, then we would be out a bit of money, but if it doesn't we wouldn't lose that $200/month.
We are currently at 5.1%, and he said he could get us 3.5%. The cost to refinance in total would be $2000.
Re: Would you refinance?
TTC since June 2012
Refinance is always an option. Be sure to check everything out. I know alot of people who were happy with their results of refinancing. My mom and dad just did a refinance, however they dropped their loan to a 10 year loan so their cost per month didn't change all that much. We were looking into refinancing our home, but i had a hard time with getting "locked" (for lack of a better word) back in to another 30 year loan, when i had already been there for 7 years. So my advice is just to look at everything as a whole, and do what is best for you!
We decided to short sale and our house sold in 1 week and we closed 2 months later.
I figured, keeping the principle the same (in our case it was 279K) and the house sold at 131K. not worth the refinance in our case.
If you want to keep that house and rent it, i do think refinance is a good idea.
HTH
I guess although your mortgage could be lowered in a refi...the costs of renting might actually make refi/rental procedure a moot point. It may end up being a wash.
Will you be the property managers? Or, will you hire a separate party to go to the house and make a mid-night visit to solve the plumbing issue?
What about damage? Rentals, even by the nicest tenents, get worn, torn and damaged. How much are you willing to put back into this house to fix it up for a new tenent or to sell it?
What about doing a refi, staying in the home and adding on an addition? Building out over the garage? Finishing off the basement and making it liveable if it isn't already?
Depending on how much you owe compared to what the home's value is, you might be able to do a Home Equity Loan for the money for the additional space you need. Then you could stay there longer - getting the space - saving on the headache of renting...
Just some other options...