Should I pay down my jumbo and switch to a 15 year fixed?

Highlycaff · Joined: 05 Oct 2009 Posts: 1 Location: Boston, MA

Should I pay down my jumbo and switch to a 15 year fixed?
Okay mortgage geniuses. This is a tough question. Here's the background:
I have a $455,000 mortgage.
5.75% rate
The loan is "interest only" until May 2015, at which time rate stays at 5.75 but it amortizes over 20 years.
I pay an extra $1000 per month now, and pay an extra $10,000 per year 1 time (both are contingent upon current job, which is at very good $)

Here's the question, since I have a jumbo now, is it worth it to pay down $38,000 to move from a jumbo to a conventional, and move into a 15 year fixed rate @ 4.25-4.5%? I am doing very well in stock market now. Is it a wise move to part with the cash, pay down to a conventional, and suck it up for the higher payment?

Thanks in advance for the advice!

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

I would consider two options...

1. Do exactly what you desribed. Pay down the loan into conventional territory then refi to a 15yr at that rate.

OR

2. Do not refi. Take all extra cash and buy into an investment property. Multi family building. You will build greater wealth that way.