I have had some interesting questions as of late about refinancing, selling, and rental property, so I thought I would give you some ideas. First and foremost, the best answer is one specific to your situation. So the best course of action is to just give me a call. I can ask a bunch of questions, and I will happily tell you what I really think about your exact query.
The first was a friend who had a fifteen year mortgage already, and she had talked with her financial planner about getting a new fifteen year mortgage, because with todays rates, she could reduce her monthly payment by a couple of hundred dollars a month. The most important factor to me was did she need the extra couple hundred dollars a month. The reason for that is, if the answer is yes, then it makes a lot of sense to do it.
In her instance, the answer was no. Because of that I told her it was in her best interest to keep the mortgage she has. Here is why. To make the numbers easy, let’s say her mortgage is $1,200 month. So if her new mortgage was $1,000 a month, that saves her $200 a month, or $2,400 a year.
However, her current mortgage only had eleven years left. That means, over those eleven years, she would be saving $26,400. ($2,400 a year times eleven years.) She would then be paying $1,000 a month for an extra four years. That means $12,000 a year, and $48,000 over four years. In order to save that $26,400, she would be paying an extra $48,000 for it. It would cost her $21,600 to save $200 a month.
Again, this might make a lot of sense if money is tight right now, and then refinancing becomes the best choice. If all you are thinking about is your monthly payment, though, you might make a poor decision long term.
Please give me a call or shoot me an email any time. I am very happy to help, and I will give you my best advice for your situation. I have tried to talk a couple of people out of selling their houses with me this year, because they wanted rental property, and they already owned real estate. I am going to think about you, and what is best for you.
As always, I love doing what I do. I love looking at the market, and I love building relationships with the people I get to help. Let me know how I can help you. Call me today. You can reach me at 515.639.0047 or RyanLynch@KW.com. I am good at what I do, and I want to help you.
~Ryan Lynch
