All,
I am considering refinancing and have some questions.
My current loan is for $153,000. The house used to be appraised higher, but now Zillow says it's worth about $160,000. I don't know what the actual appraisal would come back at, but I'm assuming I have a 95% loan to value.
My current mortgage is a 30year with about 26 years left, at 4.88% APR rate. Payment is $883/month for principle/interest.
Considering refinance at 15 year fixed, 3.404 APR - Payment $1,075.08 principle/interest. Because of the loan to value, I would also have PMI of about $45/month. Direct costs would be around $2,500 for title, appraisal, etc.
My credit is excellent.
I'm currently maxing out my 401k and HSA, and working on maxing out my IRA (about halfway there for spouse and I). We have a student loan at 5.125% and $28k left owed on it, that should be paid off in 3 years.
My plan was to make sure I'm maxing all 401k/IRA/HSA funds and then put any extra to the house to pay it off. If I don't refinance, the house should be paid off by 2022 at the latest.
My question is, is it worth it to refinance and then NOT pay off the house, keeping the lower interest rate as an inflation hedge?
I'm not sure how to crunch the math on this one and would really appreciate some help on what makes the most financial sense between refi or not, paying off house or not, etc.
Thanks for any insight!