I closed on my house in late January. When my wife and I signed up for the mortgage, we were persuaded to do a 30 year ARM, interest only (for the first 5 years) type loan. The rates are great, less than 5% and payment is very low. However, I now plan to rent out the place I live in a few years down the road, and don't think I want to sell this place. This changes all the equations and I'm looking at refinancing not 2 months after I got my keys. I'm worried about the mortgage rates going up in late summer or this fall. Should I refi now or wait a bit?

 

Everything I am hearing leads me to believe that you should do it before the elections in November that rates could get higher at that time, til then you should be ok.

This week I saw 30 yr fixed at 5.4%...I would go for it now if you can, not gonna get much lower than that.

 

Do you have a pre-pay with your new mortgage? In your case if you plan on using it a income properity you should just stick with the 5/1 ARM. Because you'll need to take money out to fix something or whatnot, or just refi it at the end of the 5 years.

 

I'll post up more later.

 

I do this for a side job, and I have rentals myself. Look what you want to do is utalize the property, not pay for it. Choose an I/O ARM, get a rate like 3% and keep the monthly obligation as low as possible. I see you are in CA, so you know the value will not be dropping any time soon. Let the equity on the house build, there would be no need for you to pay off principal, the money that would be going toward the principal would be better used on another investment. Then you would be more capable of purchasing an additional rental.