Refinance an Investment Property Down to 2.625%

[Ensign1999]

While it is not going to make me FI tomorrow we were pretty excited to close on a refinance for an rental house.  Our old rate was not bad by any means (3.5% 15 year with 12 years left) and we would have been fine sticking with that loan, but with a change in employment planned for next year we were hoping to reduce some risk by lowering that loans P&I and increase the cash flow from the property.

I spoke with the current holder of the loan and three other loan sources and they all said that I had a great rate for an investment property and they couldn't do any better to where it would be worth it.  I was going to give up, but then I saw AIM Loans mentioned someplace in the forums here and did their instant online quote.  It came back with 2.625% for a 15 year loan.  I ran the numbers and the remaining interest on the old loan was about equal to the new loans interest, P&I would drop by almost $400 a month, I would recoup closing costs in about 15 months, and the increased cash flow would make me close to $40k more over the old loan for the life of the loan (based on a 4% return on investment).

We loan closed and funded yesterday.  We are pretty excited and feel a bit better about the change in employment coming up next year!

[JLee]

Nice!

I just checked AIM to see if I could refinance my house...and they want over $5k in closing costs.  Holy crap.

[Malaysia41]

Huh - I gave up on refinancing our rental years ago. 3.3%. I'd love to pull money out and refinance at 2.75 or lower. Online quotes come with lots of points though. Did you get those rates on a phone call? Would it be worth my time to call?

[SwordGuy]

Damn.  I'm impressed.

[Ensign1999]

Huh - I gave up on refinancing our rental years ago. 3.3%. I'd love to pull money out and refinance at 2.75 or lower. Online quotes come with lots of points though. Did you get those rates on a phone call? Would it be worth my time to call?

With AIM I got that rate with the online quote and then I applied online.  I'd have to go back and look to be exact, but I think I paid about 1.6 points to get the rate down to 2.625% rate.  I points calculator as well as crunching a whole bunch of other numbers to make sure buying the points was worth it to me and it worked out it was mainly due to planning on owning the house for a long time.

Nice!

I just checked AIM to see if I could refinance my house...and they want over $5k in closing costs.  Holy crap.

They did have a pretty high closing cost, but considering that no other lender had anything even close to their rate.  The higher closing cost also included the points I was buying to get the rate lower.  I achieved my goals in that my mortgage dropped by close to $400 a month, interest over the life of the loan remained about the same compared what was left on the old loan, and I would recoupe the closing costs with the amount I save in my monthly payments within a year.  It took quite a few calculations to see if it was worth it to me especially considering I would be adding a couple of years back on the loan.  In the end I figured once we have transitioned out of the military and feel secure with our finances again we would be able to make the extra payments and catch back up to where the old loan was and be even farther ahead.  Then again, with a 2.625 rate we might just invest any money we would be putting toward the loan and do even better.