Refinance from 15 to 30 year

[Bennett Smoot]

I know people often refinance from a 30 year to a 15 if they can get a competitive rate that does not dramatically increase the monthly payment. I am looking at doing the opposite. I bought a property (my first) with a 15 year VA loan. I bought the property before I started seriously educating myself and diving into real estate (a mistake I know). The plan is to keep the house as a rental property. I am moving sooner than expected and do not have a ton of equity in the property. That said, the monthly rent I expect to get will not quite cover the monthly mortgage payments. I am considering refinancing from the 15 year loan to a 30 year loan using a VA Streamline or VA IRRRL. I can lower both my interest rate and my monthly payments in order to achieve positive monthly cash flow. I know I will end up paying more in the long run on interest, but I will also be getting a better return on the investment as opposed to having to cover the difference between the mortgage and the monthly rent brought in. Just looking for other people's thoughts/comments/insights on this use of refinancing.

[Greg Scott]

Fully support!  At current interest rates, I never want to pay off my mortgages.  I'd take a million year loan if I could get it.

When you increase your principal payment, you reduce your interest expense.  That cash, is just "buying" the interest rate of your mortgage.  That means you are going to make something like a 5% return on your money. 

Alternatively, if you can get double-digit returns in real estate, aren't you better off investing those funds in new real estate investments?

Good move.