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I am lucky in that I have a spouse with a good job and a partial scholarship when I was going through med school. We were able to purchase a condo during school that has increased in value. Because of an Army deployment during med school and a gap between school and residency I was able to pay off some debt starting with school loans at a higher interest rate than my mortgage, then some paying down my mortgage. During residency I made a choice to purchase a house for mostly non-financial reasons (wanted a yard and house rentals were a little more than a mortgage would be, had gotten used to being able to change walls, flooring, etc without asking permission, had success renting out the condo and figured I could do the same with the house when I finished). The situation with that house is not as good (dropped in value some but not less than our outstanding mortgage value) but I recently accepted an offer to stay on as faculty at the institution where I am in residency. So now I am trying to figure out the best financial move to make. My choices (feel free to add other options)
Refinance both mortgages separately (the condo is 5.875% and the house is 5.375 but it is FHA so there is PMI). Two mortgage refinances means two sets of fees though.
Refinance the condo for as much as possible. This way I take the money I can get out of it and pay down the house (plus some of the bump in pay can go to this as well). The condo is a rental property now so the interest deduction comes off my rental income (so more is ok). And we just take the standard deduction once the house mortgage interest isn't enough to make itemizing better. Not sure if doing this would change the interest rate I would get though.
Refinance the condo just for that balance. Use some of my bump in pay to pay down the house over time (probably not very long unless I get extravagant with my spending-it is a hefty increase)
Screw the refinancing and just finish paying off the condo and the house using the bump in pay (If I took half the difference in pay and paid down the mortgages it would take about 2 yrs but I am not actually trying to figure out how taxes would factor in so maybe it would be longer). I would want to make sure I max out the retirement plan at my new job and IRA's for my husband and I. Once you do that do you just use a taxable investment account for retirement saving-I want to be able to retire as early as possible even if I decide to keep working. My thought is that two paid off properties would be good to have and rent out (probably would get management companies if I move later just to reduce the hassle, even if they charge a lot the rest is mostly profit after you take out taxes, etc)
We have no credit card debt, car loans, and the only student loans I have left are at 5% (which I would start paying off after the mortgage unless someone has a good rational to do otherwise-it is only about 6 K) and 2.875% (which I will just keep paying my required payments on-no need to pay that off early).
Refinance both mortgages separately (the condo is 5.875% and the house is 5.375 but it is FHA so there is PMI). Two mortgage refinances means two sets of fees though.
Refinance the condo for as much as possible. This way I take the money I can get out of it and pay down the house (plus some of the bump in pay can go to this as well). The condo is a rental property now so the interest deduction comes off my rental income (so more is ok). And we just take the standard deduction once the house mortgage interest isn't enough to make itemizing better. Not sure if doing this would change the interest rate I would get though.
Refinance the condo just for that balance. Use some of my bump in pay to pay down the house over time (probably not very long unless I get extravagant with my spending-it is a hefty increase)
Screw the refinancing and just finish paying off the condo and the house using the bump in pay (If I took half the difference in pay and paid down the mortgages it would take about 2 yrs but I am not actually trying to figure out how taxes would factor in so maybe it would be longer). I would want to make sure I max out the retirement plan at my new job and IRA's for my husband and I. Once you do that do you just use a taxable investment account for retirement saving-I want to be able to retire as early as possible even if I decide to keep working. My thought is that two paid off properties would be good to have and rent out (probably would get management companies if I move later just to reduce the hassle, even if they charge a lot the rest is mostly profit after you take out taxes, etc)
We have no credit card debt, car loans, and the only student loans I have left are at 5% (which I would start paying off after the mortgage unless someone has a good rational to do otherwise-it is only about 6 K) and 2.875% (which I will just keep paying my required payments on-no need to pay that off early).