[quote=sdrealtor]If it was me, I would keep the mortgage and rent it out while I was gone. You could always pay it off at a later date but with that kind of interest rate its better off to have the flexibility. I might consider, refinancing into a 15 yr loan too as you can get owner occupied rates which should be in the low to mid 3’s now or even a 5/1 or 10/1 ARM on a 30 yr to take advantage of lower rates.
BTW, I live in the sister community to yours and have for 12 years. While not a popular belief around here I think LC Oaks is a bit under valued relative to the rest of the market around here. Not that I would expect great returns in the short run but I think LC Oaks will do better than average for this area over the next 10 to 20 years.[/quote]
Agree with this, except for the part about refinancing into an ARM — and you can’t legally get a new owner-occupied mortgage if you’re renting it out, can you? One of the reasons you’d be keeping the mortgage is so that you can get a higher return on your money, later. In 5, 10, or 15 years, we might be seeing 1% rates, but we might also be seeing 20%+ rates if the currency devaluation happens, as so many think it will. Paying 5% while making 10-20% would be your goal.
Keep what you know and can easily handle. A 30-yr FRM is great. You can always accelerate payments (make sure you don’t have pre-payment penalties) and make it a 15-yr loan (or less) if you choose to do so. But you should keep the flexibility of the 30-year, IMO.
