I have 22 years left on my home mortgage, at 3.875%. I owe $262k. Payments: $1496, $649 principal, and $847 interest.

Allied Mortgage has a 20-year loan with “zero” cost, 2.875%, giving a $1436 payment ($60 less) with the first payment of $809 principal ($160 more) and $627 interest ($220 less). I’m going to live here at least 5 more years. Our credit score is 750.

I have 3 loans on rental properties with similar amounts and years left, at 4.25%

Should I pursue re-financing at my house and/or rentals? I suspect the loans aren’t really “zero cost” or perhaps you need an 830-credit score to get that.

What do you think? Any banks you like? Thanks, Bill

PS: thanks to those who helped on "Maintenance you regret" post. I got my system (on excel) running and happily checked off dryer ducts cleaned today:-)

sometimes "no cost" means lender costs - you still pay for title insurance, appraisal, title work, closing, etc.

4.25 on non-owner occupied properties is a great deal. I don't think you are going to beat that without spending a whole lot on loan fees. I wouldn't.

I suggest you PAY for a financial planner to do a proper "report card" on where you are and where you are going and how to get there

Besides their financial analysis they also have great contacts for financial services

Normally the spread to consider a refi is just over 1%. You are right there. So it depends largely on the cost of the refi. Nicole is spot on with assessment about what no cost means.

It is much easier to recast a commercial loan than a residential owner occupied loan.

I'll find you a link to a series of financial calculators that will allow you to run your own analysis. It looks like you will be losing two year of payments, but that is with that pay back being in 2040

Links to multiple Calculators

hughcalc.org/index.php

Ask your lender for a Good Faith Estimate of Closing costs. If you plan on living there 5 more years, be sure that is enough savings to recoup your costs. For the hassle factor, I'd want to come out at least $1000 ahead for my troubles after 3 years of savings on the lower interest rate payment, since plans do change and sometimes we move sooner than expected.

Do not forget local Credit unions. Following advice given here over the years, we went to one here for a ZHELOC some months back when other banks locked down for a bit. It went well.

Too, rates for a 15 test are very low, so you might for well now.

Thanks Nicole. Great info. I see the APR can be the same as the rate (zero cost), and like you said, you still pay for title insurance, appraisal, title work, and other stuff. Seems like I need to come up with an estimate of those costs to do an analysis.

Thanks JB, 4.25 does sound good .

Yes, that’s the question isn’t it Steve; how close to “zero” cost is it.

Your right nhsailmaker, about paying for a financial planner, I don’t know what I don’t know and the responses to this post make me realize my limited knowledge. I don’t know anyone who uses one and I’m afraid the planner’s interests don’t align with mine. Like what do you do, look at their Yelp ratings?

I would not pass up the oppertunity to speak with a lender. Lets assume you are a good customer for them....if you bring them four loans....the work is in the first one, after that the papers are already filled out so-to-speak.

Lately a credit union seemed to be most responsive.

I get a barrage of offers from Mr. Cooper (Geez sales sales sales - however once you speak with one of their officers they seem nice)

And Rocket mortgage was recommended but I have had no dealings with them.

My best guess is that rates will continue to stay low and I hope they go down to two.

I wanted to add that you are a good customer, and with more loan business they may see you as a great customer.

Good points Sid about the value of your time, and the GFE for the costs. My wife hates when I put a value on our time, especially when it seems like we are spending more money.

Smokowna, my current bank just said they’ll do a 20 year at 2.75%, 2.863 APR. The closing costs are $5k and these are added to the loan, so my balance goes from 262k to 267k. I only pay a few “out of pocket” expenses. My appraisal is waived because of my low LTV. I’m told payments are reduced by $50 per month and the loan ends 1.5 years sooner, go to a 20 year mortgage, from my current loan maturity of 5/42.

Thanks Ray-N-Pa for the link. Awesome site. When I plugged above numbers into the hughcalc dot org, I think I show a breakeven time of 17 month. I say “I think” because I’m not sure I fully understand the calculation output. When I used a different hughcalc calculator, I come back with “closing costs recouped in 84 months” which makes sense as $5000 closing costs divided by $50 month savings equals 100 months. So, you can see from my babbling, I still “have much to learn Weedhopper”.

Thinking about your situation again....its tough to answer without knowing what you are trying to achieve.

It appears that the payment offered is nearly the same as what you have but you shave two years off of the note length. That is great if you want it paid off sooner.....but it doesn't do anything for increasing cash flow.

If you want to increase cash flow you could target the loan with the smallest balance and throw either money or lower rates at that.

If you want to get out of debt as quickly as possible you create a payment tsunami After loan with the smallest balance is paid off you can stack that payment on with the next loan with the next smallest balance. This creates a payment tsunami as the loans get paid off.

Tough questions. Every month I calculate our net worth and I see paying loan principal increases our net worth. In my scenario of this post, I note that If refinanced to a 20 year loan, I'd pay $160 more in principal, so this seems good to me.

My cashflow is fine, and other than 4 mortgages, I owe no money I suppose my goal is to have plenty of money in retirement and have fun along the way.

I was thinking now might be a good time to purchase another student rental property of something else. A cash-out refinance would lend itself to a cash purchase of a rental, but my current company said they don't do cash-out refi.

not sure which one to choose?