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Hi All,
New to this board, but looking for a little bit of expert analysis. Locked in a series of rates to refinance my house, and just looking for thoughts on which option makes the most financial sense. I have a though on which option makes the most sense, but want to get other perspectives.
Background:
$473,000 Appraised value of house
Current loan $408,000 with about 352 months left. Current 4.125 interest rate.
Any excess cash would be used to pay off early student loans at about a 6% interest rate.
Three options presented by mortgage company (planning to roll all expenses back into mortgage, up to conforming loan limit of $417,000 and take cash out upt to $2000 max, to pay off 6% student loans):
1) 30 year mortgage - Loan amount of $417,000 at 3.250% has a payment of $2763.68 (principal, interest, tax, insurance, pmi) but you only get about $1200 cash back. PMI drops off automatically in 65 months.
2) 30 year mortgage - Loan amount of $414,700 at 3.375% has a payment of $2781.11 (PITI & MI) and you get $2,000 cash back. PMI drops off automatically in 63 months.
3) 30 year mortgage - Loan amount of $411,200 at 3.500% has a payment of $2792.49 (PITI & MI) and you get $2,000 cash back. PMI drops off automatically in 60 months.
If you need the 2K back I would go option 2.