Refinance Closing Cost Payment Options

[Manco Snead]

Greetings,

I am considering refinancing a long-term hold duplex which is currently cash flowing approx. $200/month. The refi would lower my interest rate by .75%. I have the option of either paying up front the $3500-$4000 refinance closing costs, or having them rolled into the new loan payment amount. Again, this is a long term hold and I am not in a rush to pay it off. I can afford to pay the closing costs in cash, but my inclination given my long-term strategy is to roll them into the payment amount. Any thoughts?  Thanks.

[Darren Eady]

Roll them into the payment instead of coming out of pocket on an investment property at least until the point when you have no more consumer debt or primary residence debt.  Even then, you could still have better investments that pay you much better than paying down a mortgage or paying for closing costs with that same cash.  Paying costs (on an investment loan) is one of the last things you should be doing with your money!  My cash is always earning at least 12%.