Should I refinance my rental property?
Hi, I'm new here and new to real estate investing so please bear with me. :)
I currently am renting out my first house that I bought 10 yrs ago for the same amount that the mortgage payment is each month. My interest rate is 5.87%. I have been approved for a 4.5% interest refi but the total origination costs would be $7200 and I might also have to come out of pocket $2600 at closing if the house doesn't appraise for a certain amount. Not to mention it would be adding 10 yrs back to my mortgage because its refinancing back into a new 30yr term. If I refinanced I would get $230/month cash flow out of the property instead of breaking even/losing money each month. I am confused at how I should be thinking about this. Do I do the refi because I should be cash flowing each month but add 10yrs back to my term and all the subsequent interest as well or do I stay the course and try to pay it off quicker? My credit could definitely be better and might help with the interest rate and closing costs? I don't want to sell it because I want this to be a long term investment vehicle. ALSO, I am myself renting a house currently because I had to move so quickly but want to buy ASAP but would need to refi my current house (mentioned above) because I can only have 1 fha loan at a time. So confused! Please help me make sense of this and how I should be viewing this property investment wise. Thanks!