I have around 25% equity in my house. House is worth $220k and I have around $55k in equity. Would refinancing be a good idea giving the fact that my credit has improved? Also, I was thinking about refinancing to take that money out and invest in another house. How does the refinancing process work?
If you aren’t living in the property you won’t be able to get any money out, in fact it will probably cost you money, at least the origination and other misc fees as you usually can’t get more than 75% Ltv on an investment property. Even 20% on a primary won’t get you much, MAYBE enough to cover the cost of the new mortgage.
If you can get a full percent loan rate and plan to stay for at least 8-10 years it will probably pay for itself. If you can afford the payments on a 15 year loan that would probably save you another 1/2 a percent interest rate. but the higher payment could hurt your chances of qualifying for that next house.