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Updated about 4 years ago on . Most recent reply
Refinance Closing Costs VS Breakeven Point
Hello,
If one can refinance and reduce their interest rate on a investment property by 2% points but it takes 2.5 years to just recover all the fees is that normal breakeven time and worth doing it. The closing costs come to around 5K on a $105K loan out of which $1K is prepaid & escrow and monthly savings on interest is around $180. No points on loan. With this one needs to hold onto the property for at least 3 plus years to have some benefit as we will be rolling over the closing costs into new loan and you pay interest now on a higher loan balance.
Thank you.