All Forum Posts by: Rodney Kuhl

@Justin Owens @Ben G. @Shawn Holsapple Thanks for asking and sharing insights! I spoke with the lender today and he told me the wrong rate. What is going to happen is I will keep the same interest rate and get rid of PMI, so I'll save about $60/mo.

Sorry for wasting your time.

@Ross Denman Welcome to you and same goes for you as well.

I was using a great lender for a couple of new rental purchases. I used him for my first rental as well and he is great. I figured I'd ask him about re-financing my personal residence while I was at it with the rates as low as they are now and to see if we could get out of paying PMI. We bought the house last year for $182k and put 5% down. We pay a bit more than our payment every month so our balance is just under $170k. I spoke with 3 realtors and got estimates between $185k and $195k for the value of our house.

The appraisal came back today at $185k. Which means our rate would jump an additional .25%, or we can pay down to 90% LTV. The latter option would cost about $2k out of pocket. The re-finance would actually increase our monthly payment by about $20, but we would not be paying any PMI so it would be a better tax write off. We paid $400 for the appraisal and if we close on the re-fi we get a credit back for the appraisal so we would pay nothing out of pocket (unless we chose to pay down to 90%). If we leave it, our payment stays the same but we are out $400.

I see my options as this:

1) Don't close on the re-fi, keep our payment the same, but accept losing $400.

2) Close on the re-fi, accept the higher payment of $20/mo, and look to re-fi again in a year.

3) Close on the re-fi and pay down to 90% LTV. However, that is $2k out of pocket that we then don't have to purchase another rental property.


What would you do?

@Ryan Mullin I have a great lender I have worked with. I will PM you his contact info..

@Brenna C. Impressive! Best of luck!

@Barry Smith I'm not a financial expert by any means, but I think it all depends on the interest rates you are looking at. Like @Sam Elder said above, if you can re-fi and have a lower rate than you are paying on your credit cards (which I assume would be the case), it would probably be a good idea to do so. The high interest debt is good to get rid of.

@Roy N. Right, so if I am able to make 15-20% return on a buy and hold investment, then I'm better off investing than paying down the student loans, which is what I'm doing.

@Vala Shahabi Awesome!

@Roy N. Can you explain your math for me? I'm usually good with numbers but not putting those numbers together quickly in my head.

@Roy C. This a a great question and one that I don't think has a "right" answer. I've contemplated this myself and have analyzed the numbers. For me, I decided to invest in real estate rather than pay off my student loans. I figure my student loans are between 5-6%, but I can make much better returns than that on a rental property. I can use that extra income to help pay off the student loans, and then once they are paid off I'll still have an asset to keep producing income. Good luck!