Quote:
Originally Posted by JustinHEMI
Both good points and I'm not interested in renting out my current home. For the area I'm moving to, even if things slow down, I don't expect housing prices to "crash," which is what has me leaning towards buy now, refinance later.
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Just be aware that when you refinance if your home has dropped in value you will have to make up the difference to retain your loan to value ratio.
Example:
$ 500,000 home with 20% down = 400,000 mortgage.
Refinace in 3-5 years but home is only worth $400,000.
An 80% mortgage (320,000) will require you to make up the difference between your remaining balance and $320k in cash (or another loan if you qualify).
Of course this might be an extreme example but depending on area could be relevent. West coast homes can zig zag in value depending on the economy, 2008-2009 was devestating to WC home values as an example. Florida can be as well depending on the economy and hurricanes, the time to refinance will be a critical decision.