San Diego Housing Market News and Analysis

You have another option which is to refi the current loan balance. Its still a conforming loan and rate should be better than you have.

Matt,

Depends partly on how much cash you have. If I were you, I'd try to keep six months worth of living expenses in cash. That way if you lose your job or the renter stops paying rent, you've got a cushion. After that, I'd go ahead and pay down the loan as much as possible. Like you, I can't think of any reasonably safe investment that pays more than you're going to pay to borrow the money. So, why pay to borrow money when you've got cash?

XBoxBoy

Assuming you have a sufficient cash reserve (good suggestion by XBoxBoy), I'd pay down and refinance.

You'd be getting $600 per month for an investment of $63,000 + closing costs.

Not gonna get that anywhere else.

Matt- Are the refi rates owner occupied or investment property?

I am just curious. What are the kinds of people who rent $4200 a month? I am assuming they will be pretty decent tenants if you can find one?

Thats the going rent for a newer home in the South Carlsbad/Encinitas area for 4BR and 3000 sq ft plus. IFIRC Matt is in LC Oaks and could be charging below market now. I've seen rents up to $6000 there and most of the homes with at least 4,000 sq ft are starting around $4500.

Maybe it's just me.. But it seems like spending $4000/month on rent....means time to buy,even if it means buying a crapier location... I mean, we're talking $50k a year in rent....Ouch..But then again, maybe for some people $50k a year is pocket change, and the sad realization that I'm still poor because I think it's a lot of money to be paying for rent.

If you think you're only going to be in the region for a year - why would you buy. Hard to make up the transaction costs.

If I'm going to be only living there for 1 year, I definitely would find a place cheaper to rent, and skip the "niceness" factor

How about if someone is giving you a generous housing allowance?

Another thing to consider is some renters view living in a nice community with access to great schools as a better option than living in a more modest area and paying for private schools.

The rate i am getting is for investment not owner occupied property. Without the paydown to 417 the best i can currently do is a 4,5 refi, partially due to my credit being dinged a bit due to 2 small bills lost in the overseas move. The tenant was identified/screened through my realtor (who is managing the property) and was downsizing from a large estate in olivenhain but wanted to keep children near friends and schools. The home is 4000 sq ft LC oaks built in late 2004. I have seen higher rents achieved but am appreciating the fact that so far no issues and paying on time.

I guess that would make a difference, but that brings me back to the original thing about me personally...that I'm a poor peon who wouldn't typically get a relocation allowance *that* generous I think...:)

For a short term, I could tolerate a tiny home in a nicer part of town. But that's just me. I know different strokes for different folks..