Refinance or pay off the property
Hey All,
My husband and I purchased a SFH 5 years ago and just realized that the commerical loan we took out ( under the LLC name) has a maturity date of 5 years. We probably should've known that and refinance when rate was low but we really didn't realize the loan was set for 5 years since all other commerical loans we had with the same lender are 20 years.
Anyway, we have about 55k left on the loan,so we are deciding on 2 options, one is to refinance with other lender at 9.25% for 20 years which will make our payment $100/ month higher than before but we will still have cash flow for $394. Or we could sell one of the other properties which makes maybe $180/month cashflow and use the proceeds to pay off the loan. With the loan being paid off, we will make about $960/month cashflow.
What are your thoughts? Which route do you think is more beneficial?
Thanks !
Most Popular Reply
@Amy Lin, have you approached the lender about a solution? Maybe they would do a loan modification and re-amortize the loan.
If you were to sell another property to pay this one off, consider the tax implication of that sale. The property has likely gained value while you have depreciated it on your taxes. So, your tax basis when selling will be WELL below the sale price leaving you with potentially a healthy tax obligation.