Should I refinance my rental properties?

Financing, Hard Money Lenders, Private Money
1

Hello all.

I was talking to some banks today about refinancing two investment properties. Both are on 30-year fixed mortgages and I want to refinance to 30-year fixed mortgages with lower interest rates.

  1. Currently at 6.375%. If I go down to 4.99%, I would save $134/month.

  2. Currently at 5.370%. If I go down to 4.99%, I would save $114/month.

So I would save a total of $248/month, but I would be adding a total of around $10,000 because of closing costs and points (because they are investment properties).

Any thoughts?

2

have you looked at refinancing to 15 year fixed? I have a property at 6 3/8% that I am considering going to 15 year, the payment will be very close to my current payment, and its amazing just how much more of your payment is going to principal

how long do you plan on holding your properties?

3

It would take about 3-1/2 years to pay back the $10K from the $248 savings, so basically for that time, you see no gain but after that it will reflect as a positive in the cashflow area…

Keith

4

Hmm, that’s a good point about shortening the life of the loan. I’ll look into that. I’m planning on holding on to the properties for a long time.

5

That’s true. Even if I feel an immediate effect on the cash flow, I’ll have less equity as a result.