Should I do Choice A or B?
I have pruchased my partner's share of the house I live in. I plan to stay in the house for 5 years and then sell.
A) Assume my current mortgage for $1,700/mos. and then re-fi in 3 years when the fixed rate expires.. Cost of assuming morrgage = $1,000 now, + $3,000 in 3 years when I have to re-fi.
B) Re-Fi now at a rate I locked last month for $1,800 / mos for the entire 5 years. Cost of Re-Fi = $3,000 now.
It is tempting to Assume the loan and save $2K for now, plus 100/ mos. for 3 years. However, I would have to pay the 3K to re-fi in 3 years from now anyway, and the rates might be a lot higher - negating the monthly savings in the first 3 years. On the other hand, I might consider the interest earned on saving the 1st 3 years, plus the additional tax right off this year for the closing costs and additional inteest paid on the mortgage.
Thanks,