My 15year monthly comes out to be $3,032, much lower than my current 30year, which I’m paying almost $3750/month. Now with the $718 in savings, I can go make payments on a nice car lease…heh heh..Just kidding. I’m going to decide what to do with the extra…Debating between applying the difference to extra principal or adding more to a kid’s custodial account or tucking more away for emergencies (at least until the government figures out how to attach a savings tax for savings)…
at one point dipped to 3.65% apr (3.5% before costs)…But oh well.
So…to add drama to this saga…..after going through this refinancing, one of my relatives (distant aunt/uncle) on fixed income were complaining that their money is earning pidly 2% on a CD/etc….
So they offered to make me a personal loan at 3.5% for 15 years for the same amount, secured by my home.
I’m thinking about this…I get slightly better rate, my relative gets a slightly better return, the home is secured from their perspective since the LTV would be less than 50%…I’d still get my tax writeoff on the interest..It cuts Bank of America(who purchased loan) out of the equation…Doubly great, since I’d rather send the interest to someone I know than that bank…
The drawback I think would be, it’s a lot more paperwork to keep track of from the IRS perspective, and also mixing money with relatives is usually not a good thing. But in this case, it’s a real secured loan..Other drawbacks are that they probably could find something with higher returns, especially if rates creep up.. Conversely, if rates fall lower, it I guess I could either renegotiate with them or find a bank to refinance again…..I’d say my chances of defaulting are pretty low, since I’m am pretty “safe” investment, I think… 🙂
So, what says you? Should I try to borrow from said relatives?
