Well, the truth is it feels like a raise. Today I signed the papers for refinancing two rentals that are my sole and separate property. I have been thinking about it for several years but dragged my feet, mainly because I didn't want to deal with B of A (the current lender), and home values had dropped dramatically. But values are finally creeping up again.

I remembered the name of the loan broker I used when I bought the houses. He used to be with Countrywide (now B of A) but is now w/ a small mortgage company. He was able to get a rate of 3.625% locked in with no points. This is an excellent rate for investment property. I also decided to have impounds because it makes life easier for me. I will no longer have to deal with tax bills or annual insurance premiums... only HOA fees.

It will take about 15 months to recover the closing costs but after that I will have about $447 a month net, after paying for property management and reserving funds for HOA fees to be paid twice a year. Wish I'd done it sooner, especially since I've had a negative cash flow of ~$65 a month.

The cash flow will come in handy... we are expecting out first grandchild (a boy) early next year and I will want to start a college savings account. It's never too early!