DIYbanter - View Single Post - The Money Store

wrote:
CORRECTED & DETAILED INQUIRY:

We were just quoted a rate of 4.625% (5.125 APR) for a $119K, 7/1 I.O.
ARM investment property refinance with a cash out from the money store.
the closing costs are around $8K but the monthly P&I is very low, only
$396! We need the cash flow, so are tempted by this low monthly
payment.

Having never refinanced, I have to ask. Isn't $8k about ten times the
normal cost for a refi?

Also if its an interest only loan, then the P&I isn't $396, the I is $396 and you
aren't making any principle payments at all. That is where a significant portion
of the monthly "savings" comes from.

If you really NEED the cash flow, then you really need it. Do what you need
to do. If you want to take the money just to leverage another investment
property, it is more risk than I would take.