Son's Refinace Problem/Question
Question from my son, he plans to move in a year but considering a reapraising on his current home to lower month payment.
However the home was re-appraised at a lower value than the purchase price/current mortgage. He would still save some monthly, but now after closing costs he only stands to save about 6 grand total during the time he intends to stay in the home.
In order to save that money over the course of staying in the home, he has to come up with slightly more than half of that right away because the closing costs come out of pocket and cannot be avoided or rolled into the mortgage. In order to pay the closing costs he would be evaporating what little cash savings he has.
The family has gone back and forth about whether its worth it. What do you think? Do you feel that the home when reappraised for sale a year and half or so from now would ever get back closer to original purchase price? Or does refinacing with this new value lock that figure into place when he goes to resell?
I think I know the right answer to this although its different than what he thinks... I was hoping to hear opinion from a third party.