Should we refinance?
Hello. I need your input, guys. We're trying to refinance a rental property, and the appraisal came in lower than we expect it to be. FYI, we don't have plans of selling it in the next 5 years and we have the money to pay down the balance (13K). Out of pocket cost will be $3500, give or take.
This is from the lender (copied and paste) Any thoughts? Thank you in advance.
Attached you will find a copy of your appraisal. The Loan to Value Ratio is at 78% LTV. Originally we thought the value was $410,000K it came in at $390,000.00. The lower value brings are LTV from 74% to to 78%. Guidelines for Fannie Mae require that investment properties are at 75% LTV or less. In order to make this loan work we need to bring the first mortgage down to $292,500.00 and no more. Current payoff is $306,215.00, this means in order to do this as one loan, we need to have you bring in funds to close in the amount of $13,715.00 at the close of escrow.
We would like to know f you are able to bring these funds in for closingÃ¯Â¿Â½ With the new loan amount your payment actually drops to $1503.86, vs 1568.13 which is -$64.17 lower monthly which is good for when youÃ¯Â¿Â½re going to be buying your primary residence.
It saves a total of 23,101.20 in payments in 30 yrs. Therefor by paying down 13,715.00 to bring the balance down, (23,101.00-13,715.00=9386.00) it actually saves you $9,386.00 in additional interest over the life of the loan.