Investing Options. Refinance or ...

[Alan Hicks]

I have a second home that my disabled father lives in and 'rents' from me. 

I have owned it for 12 years.

Mortgage Balance = 79k @ 5.75% ( worth around 130k, paid 108k )

Mortgage = $812

Rent = $600

Net = $-212 each month (yes I lose money every month )

Option:

1. Pay the balance down to 50k, and finance back to 30 years:

50k mortgage @ 4.5% = payment would be around $350/month ( includes taxes and insurance ).

So, I would no longer be losing money each month ($212), and now would be bringing in more rent than mortgage ($255) = that's total is about $450 each month.

(450*12 = 5604) / 29000 invested = 19%

Thoughts ?