A friend is refinancing her house. She is looking to lease her home and will be moving to another state to be closer to family. The cash out will be used to purchase a car outright (does not want a car payment). The rest of the cash back will be used as a down payment on another home once she moves and for a buffer until she gets settled out there.
Option "A" got approved today. It is an interest only loan. Option "B" is the alternative.
Option "A" 6.89% interest rate on 1st and 2nd loan. Payment is $1,630 monthly with taxes and insurance included 10/20 interest only, no prepayment penalty. Fxd interest for 10 years $25,00 cash out
7% on 1st 8.625% on 2nd. Payment is $1,591.00 Not sure if taxes are included. 30 yr. fxd fully amortized $18,000 cash out
Any advice or opinions would be appreciated.