I sent an email to my favorite mortgage broker a couple of weeks ago. Ended up being able to lock in a 3.875% fixed rate (30 years) for a refi of the primary mortgage. Based on the assumption that I'd refi $246,000, it would drop the payment $140/month. Less cash each month, less interest the bank earns in the long run (even with the extra payments since I'm already 30 payments into this current mortgage). The closing costs are approximately $1,200 so it would take less than one year to re-coup my costs.
Bad news....we got a really crappy appraisal. He pulled 3 comps from a street I would never consider living on since it backs up to the interstate. We actually looked at houses on that street a few years ago, but the constant drone of the tractor trailers would have seriously put me over the edge. The appraiser won't reconsider.
So now...if I want to proceed, I'll have to bring about $9,500 to the closing table. I could pull it from the HELOC --- at a 2.75% variable rate. To refresh your memory, the HELOC is secured by the rental property. I could try to work out some kind of plan that would not only pay off this extra $9,500 but also increase my monthly cash flow. The new reduced loan amount would drop my current payment by $187 instead of $140.
What to do? What to do? Any opinions?