I purchase a house via 80/20 no money down. There is a six month prepayment penalty. I am paying 7.25% on the 80 and 11.25 on the 20. I intend to refinance after the penalty period to reduce my monthly payment. IS this possible or realistic? right now my payment is $1400 @ month and I collect is $1150. How low can my refinance payment get on a house that has a loan of $200,000??? PLease give me guidance
Thanks
Jaffe,
Kind of hard to say…
(1) What wil the house appraise for?
(2) How’s your credit?
For me personally, the rates you have are kinda high…I can cash-out refi right now for right around 6% for 80% LTV. For 90% it’s a bit higher and then there’s the MIP (which I will NOT pay!)…
If you’re currently paying 7.25% for $160K, you can shave about $100 a month off by dropping to 6.25% but again, that’s going depend on YOUR credit and YOUR lender.
You might also want to post this in the “Financing, Hard Money Lenders, Credit, Qualifying” area of the forum.
Keith
As Ted would put it, it sounds like you got yourself an aligator in your pocket. This is all going to depend on your credit rating, like keith said. You still have to count for property taxes, insurance, repairs and vacancy yet! I do not understand why people put themselves in this type of position.
OUCH on this one 
I’m always with Dan on the negative cashflow situation. I won’t go into it PERIOD. I know in many states this difficult to do, but it can be done – talk to poster REOCONSULTANT to figure out how to work things in your favor with future investments.
As of right now, you’re there. Your credit is going to play a huge part in your refinancing options (as Keith said your rates are high, especially on the 80), and remember refinancing investment property costs. At least it does for me, any lender I’ve dealt with loves to get their money out of me on my refi’s, however, I am a cash person until I get my money back out of my investment. I add that into my initial figures to insure my positive cashflow outcome.
Give us the loan-to-value amount as it stands right now and the state you are in (there are professionals from all over the good old USA here to assist you with advice). Is the six month prepayment penalty on all of it, or just the 20?
Your zero down is costing you $250/month plus taxes, and insurance. Thank goodness you have it rented.