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Old 09-16-2008, 10:16 PM
 
68 posts, read 224,867 times
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I don't know what that means.( the break even point). It will take 20 years before the interest and the principal are the same. Is that what you mean? Also, thanks for the input from everyone. It sounds like there are a lot of fees and maybe the guy was being honest. We thought it might be worth it if we could lower our payment substantially so the rent would be closer to the mortgage. It will probably rent for 1500 a month and our loan and hoa and taxes are 2100 so I thought it would give us a way to afford to rent it out. So, sounds like it is a bad idea to pay 10k to save 100 dollars a month on the payment, right?
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Old 09-16-2008, 11:55 PM
 
28 posts, read 82,454 times
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Recommend getting some advise with a tax advisor on the topic of rental property and Negative cash flow since this property will not be your primary residence. $600.00 a month + maintenance out-of-pocket.
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Old 09-17-2008, 01:45 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,595,900 times
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Quote:
Originally Posted by needrain View Post
I don't know what that means.( the break even point). It will take 20 years before the interest and the principal are the same. Is that what you mean? Also, thanks for the input from everyone. It sounds like there are a lot of fees and maybe the guy was being honest. We thought it might be worth it if we could lower our payment substantially so the rent would be closer to the mortgage. It will probably rent for 1500 a month and our loan and hoa and taxes are 2100 so I thought it would give us a way to afford to rent it out. So, sounds like it is a bad idea to pay 10k to save 100 dollars a month on the payment, right?
Quote:
Originally Posted by needrain View Post
Yes, I have a va loan fixed 6.3% 30 years, for 291000 and payed down to 284000 and it is in the state of Nevada. It was 10,000 dollars all together for the fees they would roll into the next loan. Yes, I would like to refinance and the irrl loan is the only one that will let you do that without needing to have equity in the house. We have very good credit and never missed any payments. We want to refinance to lower the payments because we need to move next May and we will rent our house out.
break even point would be your total cost to refinance and the money saved to even out.

for example: $10k in closing fee's to save $100 per month is 8.3 years. This is how long it would take to start to see the savings in the refinance.

honestly for a refinance i think $10k sound EXTREMELY high, unless you are buying discount points to drive the rate even lower. there are many different reason to do this.

Now since this would be a refinance to get a new rate. if you get a lower rate with only $2k or $4K in fee's then you can see where $100 a month makes sense. You would be looking at 1.7 or 3.3 years to break even. After which point it is that much lower.
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