Refinance or outsource a loan???

7 Replies

I'm a little confused by your question. Do you currently own a home already and you're looking to acquire a second house? 

Yeah, I would live in the first home and rent out the second. Not sure what house hacking is but if it’s what I plan on doing by refinancing my first home to buy a second property to rent then yes. I’m house hacking. 

House hacking is when you live in one unit of a MFH and rent out the other unit(s). This can also be applied to SFH's by renting out the spare bedrooms, but that's less common. Banks are typically easier to work with if the home will be occupied for the owner (better interest rates, smaller down payments, etc). As far as I know, most loans only require you to live in the home for one year.

To answer your question, I don't think one option is better than the other. It all depends on the numbers and your goals. A conventional loan may cost you more upfront as you'll likely have to put down a larger down payment on the property (unless you are going to live in it). There are also costs to refinancing. I would find 3-5 different lending institutions (a large national bank, a small local bank, a small local credit union, etc.) and discuss with them. Small local lenders tend to be more investor-friendly than large national banks. But you never know!