Re-Financed my Home - 5 Year 1% Interest Only - Good idea?

[internut33]

Cut my payments from $1314 to $760 - Payment goes up like $40 each year or some ish.

Not sure what to do (obviously have to get the current rate or do some type of refinance again) after the 5 year period is up.

I figure I'll be ready to move by then. I already have $100k in equity or close in the home so I figure interest only was good for now and put $$ on top of the interest only payment when I want (i can no penalty).

Anyone got experience in this dept?

J

[heatherf]

Are you sure you have to re-fi after the 5 years? Meaning, did they stick you with an actual balloon payment, or does it simply readjust itself to essentially a 25-year loan (amortizing the entire mortgage amount over the 25 years as opposed to 30 years)? Just things to think about....

IMO it all depends when and if you actually want to sell your house or not. :neutral:

[internut33]

My guess and I really should have paid more attention to it is it goes to the current rate at the time maybe at 25?

I believe when i looked at the schedule after the 5 years is up its right around where what I was paying.

I dunno - I'll worry about it then - Put things off, my way of doing things haha. Not a good one though.

[SunDevil]

Do you have plans for the money you are going to save?

And do you plan to make a lot more money in 5 years? You will be able to make bigger payments then.

The only problem might be if interest rates are 10-15% in 5 years or if housing prices tank or decrease, what does that mean to you?

[internut33]

I'm no expert but does anyone see rates getting to 10-15% again? And over here in the north east housing is more likley to stable rather than tank.

But who knows the future, not me.

In 5 years I hope to have a SO that can help me w/ bills. Its all me right now.

[internut33]

oh yeah and what to do w/ saved money. I need to get back into putting $ into my roth IRA & mutual funds.

Market hasn't done crap for me in years though. And I'm close to having no debt at all (well car payment and home).