We have worked hard to be in a good position financially, and debt free except for mortgage.
- Due to a surprise in a work contract, our 6-7 years in our current city (that was ending this year), will become 10-15 years. We were going to sell our house this year and move to new contract city.
- We have a $560k mortgage remaining, and $700k+ of equity.
- The 7 year ARM we had ends in august, and will likely more than double our mortgage from the 3% - 7.8% (max) based on what bank told me. Could be less, depending on market rate.
- We have $250k of liquidity/cash on hand. Been a focus last few years to have a fall back due my well paid, but volatile job. We have $2m in 401k, (max loan is $50k).
- I have $220k in bitcoin which I want to hold. This is almost all profit and selling would trigger a tax event. I see companies offering loans against Bitcoin, but thats not something researched.
- We can afford to pay the increase in mortgage which will go from $5700 (including tax/insurance) to $7100-$7800/month, (property tax is high here) but that is tighter than we'd like to live.
- I plan to retire in 5-6 years. We would sell this house on retirement. We do not want to sell now.
I see three options:
- Eat the increase on this new variable mortgage. Keep savings in place.
- Pay off whole mortgage using $250k liquidity, $50k 401k loan and maybe $260k from 401k?
- Pay down mortgage and refinance a new 7 year arm using all or partial savings/cash.
Am I missing other options and any advice would be greatly appreciated? I am a regular on this forum, but this is a throwaway post as I want to be able to share this personal detail.
I love the idea of being debt free. Mentally.
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