When to Refinance advice

Question

Hello All,

I am considering a Refi on my primary residence and would love some input if it is worth waiting longer or refiing now. Would love to know if there are any rules of thumb that people live by when it comes to refinancing. At the moment my ultimate goal is to lower the payment so when I convert this property to a rental eventually it is in a better spot to cash flow.

Current Loan - 30 yr loan on a condo starting July 2023

Remaining balance - 365k

Rate - 7.25%

Payment - 2625

Proposed Refi - 30 yr loan starting December 2025 (90% LTV)

New Loan Amount (escrowed) - 376.4k

Closing costs - 4584

Rate - 6.35%

Payment - 2348

Savings 277/m

Seth McGathey · Answer

My first question is when do you plan to convert it to a rental? Second question is if your goal is cashflow, why are you taking some money out of the property in the refi? Wouldn't it be better to leave that in if you want to cashflow?

Seems to me that if you want cashflow I would sit in it until you are getting ready to move out. That way you get more equity built up and potentially the condo appreciates more, then when you refinance the rate can be even better. (Assuming rates don't go back up at that time.)

When to Refinance advice

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