Cash out or pay off? Need advice

[Robert Walmsley]

Here is my scenario, Sacramento California.

Rental property that I owe $145K (appraised at $430K) at 3.6% 30 year, 7 years into the loan, total PITI payment $1080, currently rented to great tenants at $2200 per month.

Have a few days to decide the term of my refi, here are the choices:

15 year rate/term at 2.25% increases PITI payment to $1290, still cash flows great and I pay it off quickly.

30 year cash out ($100k, staying under 60% LTV for rate) at 2.25% brings PITI up to $1380, still cash flows well and frees up $100K for another property. But I restart the amortization and won't pay the house off for a long time.

Not a great time to invest in another deal here in CA but will I kick myself later for not pulling the funds for the right opportunity? $100K at 2.25% is cheap money, plan on just holding it until the right deal comes up. Part of my wants to pay off the rental quickly to increase cash flow to $2200 per month minus tax and expenses.

Need some advice. I’m an experienced broker/general contractor so I know the ropes on finding another future deal and controlling costs but when will that deal come is the question. Thanks for your help!

[Jon Crosby]

@Robert Walmsley. Try US Bank, they have some of the better rates, but yes you are correct it might be tough for investment property, but also surprised you are getting those rates for an investment property so who knows.  I had some luck with US Bank in the past though.