Refinance investment property from 4.357% to 3.875%
Is it worth it to refi an investment property from a 30 yr @ 4.35% to a 30 yr @3.875%? The closing costs = $5400. The payment would decrease by $135/month. The plan is to keep the property long term.
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Buydowns are really cost effective right now, I've got a bunch of investment property refinances in the high 3s and low-to-mid 4s going on.
Normally it's like 0.5% in points to buy the rate down 0.125% (so 1 point gets you 0.25% to rate). If you hop on google, you will see that that's the general "rule of thumb" for discount points.
Right now, with a lot of wholesale lenders, it's like 0.2% to 0.3% for 0.125% (so 1 point is like .5% lower to rate). Half off, or twice as much bang for your buck, however you want to put it. We're seeing upfront cost v cashflow break-even points in the 2-4 year mark (no brainer), the norm is 5-7 (might make sense, might not, have to think about it).
Needless to say, appraisers are slammed and those are taking a bit longer, due to the heightened refinance activity on top of the normal summer rush of purchase business. Essentially everyone that purchased last summer, when rates were at 7 year highs, should be looking into it. And many are.
As always: if I could predict how long this opportunity would last, I'd be on Wall Street day-trading, not doing mortgages. That's true of anyone claiming to be able to predict/time markets.