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Trina P.
  • Fort Worth, TX
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53
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To refi or not to refi

Trina P.
  • Fort Worth, TX
Posted Sep 19 2019, 04:38

We have a property in Huntsville, Alabama that we purchased three years ago. It's cash flowing well and has enough equity to refinance and pull our roughly 14.2k for about 4k in closing costs(the breakdown of expenses are below). I'm not counting the prepaid insurance and prepaid taxes in that number since we have those funds in our escrow and will be transferring them over to the new loan if we refinanced. The est. APR is $135,000.

Debts to be Paid Off $80,885.00
Discount Points $3,016.24 
Appraisal Fees $500.00 
Credit Report Fee $13.75 
Undisclosed Debt Report $31.25 
Prepaid Interest $188.64 
Insurance Renewal $468.00 
Insurance Escrow Reserves $195.00 
Tax Escrow Reserves $422.00 
Title Fees $700.00 
Lender's Title Insurance $288.00
CountyTaxes $178.00 
County Recording Fees $137.50 

Total Costs $87,023.38
Total Estimated Due at Closing ($14,265.62)
 

Essentially, we would be going from $28,700 invested to $12,800 invested. This increases our cash on cash return but lowers our monthly cash flow. These two screenshots are attached below. Here's my question. Is it worth paying 4k in closing costs to get 14.2k towards another deal? Or would it be a better value to hold off and wait for the property to possibly increase in value and take out more later? Or is it better to not refinance this property at all? 

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