Author Topic: Reader Case Study - Rent or Sell or Refinance  (Read 578 times)

macleod7066

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Reader Case Study - Rent or Sell or Refinance
« on: August 27, 2016, 11:59:21 AM »
Need some help evaluating this property that I currently own as my non primary residence and currently is being rented.

Market Value: $55000
Original Purchase price: $80000 (2008)
Original Mortgage Amount: $80000
Interest Rate: 6.25%
Mortgage Term: 30 Years
Term remaining: 22 Years
Amount remaining on mortgage: $65000
Gross Rents: $850
Principal and Interest (the P&I of your PITI - should match with the above info): $490.05 ($145.69 Principal and $344.36 Interest)
Taxes and Insurance (the T&I of your PITI): $339.95
HOA costs: $0
Deferred maintenance notes:

Anything else special or unique in regards to the numbers of the property (not the property itself; things such as city assessments, back taxes, special costs due to unique features of the property, etc. etc.):  Was purchased using the 2008 first time home owners tax loan of $8000.  Unlike the 2009 one it was not forgiven.  Currently have $4500 left that would be due this year.  Also, it is considered a investment property now, so will need to be 80% LTV to refinance.  Could take money out of my 401K and do a streamline VA Refinance on my current house to completely pay it off potentially.

Question: What do I do?  Should I refinance at 4.5% (roughly without points for $2k) but only if it appraises for enough? Credit is a 789.  Is it worthwhile to just pay it off and continue to rent it?  Should I just sell it for less than $55K and take the loss?  Your advice is appreciated.

Edit: Could throw an additional 1k each month or so to the mortgage if needed.
« Last Edit: August 27, 2016, 12:36:10 PM by macleod7066 »