How to lower mortgage payment?

Question

Have tenants renting our old new mexico home currently, but charge them the exact mortgage, so there is no current flow. How would we go about getting that mortgage down to keep rent at same rate, and start to profit off that cash flow? Or would you suggest selling that property? How do you know what is more profitable, renting it out, or rehabing and selling?

Shaun Weekes · Answer

Hello John,

What is your current interest rate on the property?  If it's isn't less than 4.875% you might strong consider refinancing because that's where rates are today at the high end even on Non-owner occupied properties.

If your rate is good another idea might be to pay down your mortgage and refinance with the new balance.  This way your payment will be lower and you're returning a profit.

Of course you don't want to put down 40K to get a return of $200 in savings as it would take over 20 years to recup your funds.  But if it's a smaller number and makes sense then move on it.

I hope this helps and just give a bit more information and I'm sure you'll get some great advice.

Curt Davis · Answer

The only way to lower the mortgage would be to refinance but I would not suggest doing that.  Be happy the home is cash flow neutral.   Keep it and worry about your next purchase.