TL;DR/Edit: As I think about this more, I guess I am trying to figure out how to use a bunch of equity in my house. Bought it for $285k and now it could be appraised at $355k. How do I use this equity?
My wife and I bought a house for $285,000 in February, and it was an absolute steal. It was originally listed for $359k. The appraisal actually came in at $295,000, so we instantly gained $10,000 in equity.
Fast forward to now, and the market is great around here. Literally every decent house listed gets 3-4 offers within 24 hours. The house two houses down is 300 square feet smaller, a little more updated, and went for $385k.
Knowing this, and just out of curiosity, I asked my realtor what our house would appraise at now. She sent me back eight comps, including four on my street, and calculated that an appraisal would come in around $355,000. Nice.
That in turn caused me to look at possibly refinancing, which in turn introduced me to SoFi's student loan cash out refinancing. They will lump everything together, but your LTV has to be 80%, or the most they will loan me (if the appraisal at $355k is accurate) is $284k.
Current Mortgage Balance = $267k
Student Loan Balance = $104k
Total Debt = $371k
Possible Refinance at 3.09% (current rate is 3.625) = $284k
Basically, I would need to put $87k towards my existing loans to lump everything together into the student loan cash out refinance. This would lump what's left on my student loans (6.1% interest rate) and mortgage (3.625%) into one loan.
I currently have about $72k in cash and more on the way (via outstanding invoices). My wife and I also have roughly $30k in principal contributions to our Roth IRAs. Basically, we could put our cash and some of our Roth principals to make this student loan cash out refinance work.
Part of me wonders whether I should just pay off the student loans and leave the mortgage; but I would love to tap into this new-found equity and leverage my interest rates down.
Options
1. Student loan cash out refinance, as described above.
2. Refinance the mortgage as-is to get a lower rate.
3. Gather up cash and pay off the student loans.
4. Put maybe $40k on the mortgage to get rid of PMI and refinance (would lower monthly cost by about $350/month)
5. Do nothing; invest the cash
Any thoughts?