I bought a house to use as a rental property in December 2014 and put 35% down, at 4.25% interest. Should I refi or sell & use money to reduce my primary to 20% and keep the dif

I only make $300 a month on rental. Of course I have taxes to pay as well that are not included in the mortgage. Currently, my mortgage balance $190,500. MIP $206 rent property balance is $52,000, worth $100,000, with FHA up front PMI $3300,

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Answered by Phillip Christenson, CFA in Plymouth, MN
It sounds like a poor investment as a rental from a cashflow perspective (no offense). If you have made money on the appreciation congratulations. Sell it, take your gains, and invest elsewhere where you can get a higher rate of return. My guess is your primary mortgage is at a low rate of interest. If that's the case then paying it off would be a lifestyle decision rather than an investing one. Strictly speaking from an investment standpoint you should keep your mortgage and invest your money. The reason it might make sense to pay down your primary is to remove the MIP. Check with your mortgage company to make sure they will remove it before you actually pay down the loan. Some mortgages require a refinance in order to remove the MIP. Please elaborate on your situation and I can try to help more. Thanks! | 08.12.15 @ 19:50
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$commenter.renderDisplayableName() — {comment} | 12.05.16 @ 04:43
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Phillip Christenson
Phillip Christenson, CFA in Plymouth, MN

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