![]() How much interest will you save in the first couple of years, just to tack another 4 years on your loan? You're paying $1200 a year in PMI, the loan will cost $6900 in fees. If there was no mortgage how much $ would you net a month? Parents dont want me to sell it because they figure in 20 years, I could be making a decent profit on it.Ugh.īut it kills me to have this monthly nut now as I stll am paying double mortgage payments and now rates will go up again next year essentially killing any chance of refinancing at all. I aas able to refi in 2011 under HARP 2 and then saw interest rates would spike in 2016, so reached out to banks to remove PMI because since 2011, I have paid down the loan an additional 40K in principal (thanks to generous raises at work). I planned to sell it since I got married and was moving into my husband's home (which happens to have almost no mortgage on it) but there was no way I had any equity to sell at the time. Biggest mistake was buying it in 2006 with less than 20% down, and after 2008 - the value dropped about $60K. We do claim expenses and depreciation on the property. My husband does our taxes using H&R Block Software. Why throw $25k at the property to not see it again for many years? No, it's not fun paying PMI, but you get to write it off as a business expense and that's a heck of a lot less than the numbers you mentioned above to pay it down and refi it. Hopefully you have a good CPA or you know how to do your taxes well, but every dime you put into the investment property should be a write-off. Just wondering if its worth kicking in $25K to get that peace of mind so to speak (plus it frees up the monthly cash flow). Thanks, I appreciate your input! I am so undecided - I have to edit my OP to reflect that I would be saving more than $ 219/month. (This is why we have a rescission period on primary residences). You can walk away from the investment and still have a home. If you are going to pay down 25K, do it on your residence. I am all for that, but we must make choices. This is an opinion and I'm sure others will disagree, likely the Dave Ramsey pupils that believe you need to be debt free, period. Repeat after me, "no, I do not have PMI in that loan." I don't see any option here worthy of spending $25,000. I am not an advocate of throwing money at an investment property unless you are in an IO ARM or a balloon because you are right you will never get that money back out until you sell. If this were your primary, my advice would be way different, I'd tell you to refinance and get an 80/10/10 with 3.75% on the first trust and you would only have to kick in 2% and closing. Honestly? I would just stay where I am at and lie to myself and say I'm not paying PMI. What to do? Is it worth it? I hate paying PMI! Option (1) also requires closing costs of about $5K but if I choose to refinance, my total mortgage payment would drop by $124/month (not including the PMI of $ 95) so total savings is $ 219/month. However, I dont have a crystal ball and if an emergency happens, I want to be in a position where I could sell the apartment and not have to kick in extra money at closing (right now, if I sold it, I'd have to pay at lesat $5-7K for RE broker's fee). I have no plans to sell property at this time and would like to hold onto it for at least another 5 years because my current tenant loves the place. If I get my rate down to 4.125%, I'd have to pay $1,200 at closing for the discount point fee. If I refinance, the lowest rate I qualify for is 3.99% but I'd have to pay $1,900 for the point reduction. If I pay $25K now, I am OUT that money and could technically still be stuck w the PMI anyway. There is no guarantee the bank would agree to 80% or even 78%. (my loan was last refinanced in 2011 so under the 5 yr rule). I'd have to pay it down to reach 75% LTV and hope the bank wants to remove PMI. Option (2) : Do nothing and just pay down $25K outright to remove PMI on current loan. Option (1) : is to go ahead and refinance to lower rate to 4.33% (no points) and kick in $25K at closing to get loan balance down to 80% LTV, or I reached out to several lenders (including my current lender) who rejected my app said I didnt have equity except for 1 lender who told me they could work with me.īased on what I was told, here are my options: My current rate is at 4.75% on a 30 yr fixed and I believe my LTV is at 92% or so (i am waiting for the appraiser's report). ![]() I would like to remove my 95%/month PMI payment and lower my overall mortgage payment. Given the feds have stayed the course on interest rates, I thought I would see if I could refinance my investment property before rates increased.
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