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Should I refinance my Rental Property?

I am currently 4 years in on a 30yr, 6.8% loan for $160k. I can refinance to a 30yr, 3.8% loan with $3600 in closing costs.  This saves me about $260 per month, which is a payback of around 13 months.

Is this a good enough deal? 

If I plan on holding the house for only 3 more years, am I better off pocketing the savings or re-investing it into the prinicipal?

THANKS!
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July 19 2012 - Lake Highlands
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Answers (3)

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Great rate for an investment/rental property - go for it.
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February 03 2013
Do you know for sure you will be able to sell in three years? If not, you will be very glad that you refinanced.

 If you don't have a large personal cash reserve, you might want to take the additional savings every month and put them into a safe, liquid, emergency cash fund. Cash is king when things go south and you'll be glad you have a stock pile. Planners were saying have cash for 6 months of expenses, but some now recommend 8-9 months.

 If this isn't an issue, and you don't have other debt, then paying down the existing mortgage makes sense. 
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July 19 2012
The refi is a good deal. Simple math.... If you stay in the loan 13+ months you win.

How you invest the savings is up to you.
Reducing principle is always good. Unless you are disciplined enough to invest the savings in stocks.
 
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July 19 2012
 
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Should I refinance my Rental Property?
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Latest answer by user729725
February 03 2013 | 3 answers
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