Updated almost 4 years ago on . Most recent reply
Refi half way through loan??
Hi Fellow BP members. I’ve got a couple questions regarding my multi-family property in CA. I have roughly 13-14 years left on my original loan and with todays interests rates and dramatic property value increase I am thinking about refinancing and taking some cash out. Question is do I do a 15, 20 or 30 year loan and what makes the most sense. Wife wants to pay it off so we are free and clear for cash flow income, which comes with a 100k plus increased monthly payment over what we currently have or is it a better option to take a 30 year loan at lower interest and lower payment than we currently have. It’s about a 1200-1500 monthly difference between cash flow and new payment. We ultimately will be living off the income the property generates down the road. Need some advice and the pros and cons of paying off the property or extending the loan. Any input or shared experience would be helpful.
Thank you
Most Popular Reply
@Chad Reynoso Depends on your age and investment goals as a whole. If you plan to expand the portfolio and buy more properties I'd cash-out and leverage more. Rates are expected to increase this year and Feds keep bringing it up. If you plan to retire and don't want to expand pay it off ASAP and bank the extra cash-flow. The 15 year mortgage is really close the remaining 14 years. Having free and clear investment properties during retirement is a major milestone. I don't know your age but you're 55-60 years I'd be focused on locking down properties, selling duds, and getting debt free.
Stability > risk at the that age but hey what do I know. I'm only 35 and leverage everything. Cheers