I have built up quite a bit of equity in a commercial building loan. I am considering re financing to cash out and pay off 10 residential loans. Reason would be to not carry property insurance on the residentials only liability.
Problem is my commercial loan is at a great rate. With current rates higher, it is painful to give up this rate. But the huge savings in reducing property insurance costs will justify this move.
Property Insurance is a critical part of risk management.
The law of averages catches up on property loss.
Personally I have seen loss / damage of investment property; due to fire on vacant investment property (which was under renovation) with reconstruction cost of about $55,000; tree branch falling on roof (occupied property) that made to replace roof for about $13,000; water damages...... Let me limit my history of issues here.... Without property insurance, we would have lost significant money.
If your interest rate saving is higher, then go for refinance and payoff.
You make the right call for risk vs. reward long term.