San Diego Housing Market News and Analysis
To pay down and refi or not
User Forum Topic
Submitted by matt on May 23, 2012 - 9:34am
I currently have a rental property in La Costa (used to be my primary home) with an outstanding balance of 480K (jumbo loan), 28 years to go, fixed payment of 2,600 at 4.75% Taxes and HOA are about another 1000 a month and the property currently rents for 4,200.
Thinking about refinancing down to 417k and am currently getting quotes between 3.875 and 4 at zero points which drops the monthly payment by a little more than 600 dollars and doubles the current cash flow to about 1,200 dollars.
Torn between doing something else with the cash and having a lower monthly payment / increasing cash flow on a home that may be my fallback if my overseas job doesn't work out.
I know many advocate that the dollar will erode over time and that long-term debt can work nicely if you can deploy the cash in the short-term more advantageously... but I haven't found any low-risk investments yielding north of 4% and i'm quite risk averse. Interested in the group's thoughts if anyone cares to comment. I'm not an expert on any of this so any thoughts/advice would be good before making a decision. Thanks...
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