I believe to have 40k – 50k equity on my home
.....I have to do something to get rid of MPI $400/monthly....running check to check.....have 4 months back up if I go after IRA...other choice you recommend ...getting rid of PMI/MPI is my next goal. ...I have kid who will be in collage in 10 yrs...
Sell the house, put 6 months living expense into FDIC insured account, the rest into IRAs. If you sell the house and get the cash before April 15th, you can put $5000 into 2012 IRA and $5500 into 2013. Double if you have a spouse with income.
Now then, with six months' living expense set aside, and more in your retirement account, any ADDITIONAL savings you can set aside can go towards a downpayment on a different house for some time in the future.
Do a 30y refi, it's the safest option you have. Others carry too much risk.
I have a question, suppose if I make an extra payment towards capital for a while, then for some reason if I happen to miss one monthly payment. Do they adjust the missed monthly payment with extra capital?
yes it is. If you are considering using it for "savings for growth". Absolutely I agree with you on that and don't even do it myself.
That's why I did not use the words "Savings Account". You did. I said 6 months living expense into FDIC insured account. Six months living expense is **NOT** a lot of money to set aside for a rainy day. Living pay check to pay check is one paycheck away from a disaster, or maybe in your case, four months away (does that include the extra taxes that will be paid?) if you blow your (very small) IRA. So many things can happen to make you blow through six months savings even if you DON'T lose your job. Like, car repairs, getting injured by a drunk driver who is also broke (it can happen, it happened to a roommate of mine), etc.