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No. of Recommendations: 6
The discover card is actually 0% until 2/2016 so only 60% of the debt would lose their 0% interest by September 2015. I made a typo in the original post. Does that change any of your recommendations?

No. It's about another $7.5k that could be paid after Sep/Oct, but still would end up being paid by Feb, 2016 - before your mortgage will reset. That will decrease the principal on your mortgage by maybe another $100.

I still believe that, if your goal is to get into a 30 year fixed rate mortgage, the bigger concern for the mortgage is if you wait until just before your rate resets to refinance, it's very likely that interest rates will have gone up, probably by more than the 0.25% or so that you will save by getting a conventional rate mortgage instead of a jumbo rate mortgage. In fact, considering that rates have been pretty solidly above 4% all year (with a slight dip down to 3.9% in Oct & Nov) it could be that the rate you will be offered on a conventional 30 year fixed in 15 - 18 months may actually be 5% or more. If you allow your current loan to reset, and it has a cap of 2% for the first increase, it would only reset to 4.94% - which is less than the 30 year mortgage rate you might be able to get. So, you need to decide what's more important to you - a lower interest rate, or having a fixed rate.

You might also look into refinancing into the PenFed 5/5 mortgage product. It will reset every 5 years, instead of holding for an initial 5 years and then resetting every year, like your current mortgage probably does. The max increase on each reset is 2%, with a lifetime cap of a 5% increase, so it couldn't even get to the max possible rate until the 3rd reset in year 20. Their rates for this mortgage are the same for both conventional and jumbo, and currently are 2.75% - which is less than your current rate. https://www.penfed.org/mortgage-rates-all/#Tab1

Disclosure - I currently have a 30 year fixed rate with PenFed at 3.25% Even with that low rate, if I weren't looking to keep this mortgage for more than 10 years, I would probably be trading it in for the 5/5 mortgage.

AJ
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