Posted on: 05th Mar, 2009 11:38 am
i have 2 choices on a cashout investment refinance on a wholly owned property for a $380,000 amount on a 30 yr fixed mortgage.
1. 4.875% with $15,433 closing costs. $2019.99 monthly payment.
2. 6.375% with $8,213 closing costs. $2,370.71 monthly payment.
(these numbers come from lendability.com)
i calculated the difference between the monthly payments as $350.72. this means i save $4208.74 per year by paying $7220 in extra closing costs. after 2 years, i have paid off the extra closing costs, and am now saving $4,208 per year in interest.
it seems to me to be a no-brainer to pay the huge closing costs for the lower interest rate since i plan to keep the property indefinitely. your thoughts?
1. 4.875% with $15,433 closing costs. $2019.99 monthly payment.
2. 6.375% with $8,213 closing costs. $2,370.71 monthly payment.
(these numbers come from lendability.com)
i calculated the difference between the monthly payments as $350.72. this means i save $4208.74 per year by paying $7220 in extra closing costs. after 2 years, i have paid off the extra closing costs, and am now saving $4,208 per year in interest.
it seems to me to be a no-brainer to pay the huge closing costs for the lower interest rate since i plan to keep the property indefinitely. your thoughts?
if you plan to own the property for longer than two years, then it would save you money in the long run.
i concur
