I started looking into refinancing the mortgages on my investment properties- no cash out refinancing given that interest rates are low; my interest rates are b/t 4.75-5.25%. It seems that closing costs are too prohibitive. I'll save ~$150-200 dollars per month at a cost of nearly $6000. Doesn't seem worth it. Am I missing something? I'd love to hear some perspective from this forum.

@Sandhya Gorman I think you're right. It works when you're not on a long term mortgage. It works when you amortize from 15yr, 20yr to a 30yr. That way you'll see the difference in your cash flow. Maybe your loan amount is to small, and because of that your savings doesn't cover the closing costs.

Originally posted by @Sandhya Gorman :

I started looking into refinancing the mortgages on my investment properties- no cash out refinancing given that interest rates are low; my interest rates are b/t 4.75-5.25%.  It seems that closing costs are too prohibitive.  I'll save ~$150-200 dollars per month at a cost of nearly $6000.  Doesn't seem worth it.  Am I missing something?  I'd love to hear some perspective from this forum.

There are some closing costs associated with the lender but the rest are fees from 3rd parties. Closing costs are closing costs nothing to do with the lender. Refi from 8% to 3% or 5% to 3% you will have the same closing costs +-.

It's a mathematical equation on your tolerance as an investor and if this transaction is in line with your short and long term goals. Invest a penny to earn a dollar.

Monthly saving $150. Closing Costs $6,000

6000 / 150 = 40 mo. / 12 = 3.33 years It will take you 3.33 years to recuperate 6K.

3.33 years 100% ROI

6.66 years 200% ROI

9.99 years 300% ROI

@Sandhya Gorman , what are the large items in the closing costs that make it add up to $6k. That seems like a lot?

Also how many years do you have left on your existing mortgages? and what length of mortgage were you looking to refinance into?

@Kevin I have 28 years left on the mortgage and plan to hold the properties at least for the next 5 years.  I’d start over with a 30 year refi so @Guifre Mora does that change the math?

@Kevin Sobilo undefined

Originally posted by @Sandhya Gorman :

@Kevin I have 28 years left on the mortgage and plan to hold the properties at least for the next 5 years.  I’d start over with a 30 year refi so @Guifre Mora does that change the math?

@Kevin Sobilo undefined

 Doesn’t change the mad even better