Combining and Refinancing Mortgages

[Dale Peto]

I have two separate mortgages,one at 4% and one at 3.5 %. Another bank will offer a lower rate, but will combine the two loans. Would I save money doing this, or would it be cheaper using the profits from both properties to pay off the one loan sooner.

[Matt Motil]

Those are both nice rates! If you can get a lower rate and you plan on keeping both properties you could roll them together and pull the cash out to go buy something new. The bank might even let you cross collateralize the two properties and roll a third purchase into the new loan under the new terms, thus saving a closing and all the fees that are associated. 

There's value in having free and clear property, for sure, but I also see the value in having cheap mortgages in place as further asset protection. If I have a 200K property with a lien for 75% LTV, an attorney is a lot less likely to go after it compared to a property that's free and clear. Attorneys get paid when their clients get paid. If there's nothing to get, then they aren't interested in even attempting in many cases. Just my $0.02