Refi primary residence

11 Replies

I would like to purchase a small multi-family loan in Colorado. A duplex or triplex that I can house hack. I have 20K cash but my primary residence has appreciated nicely and I'd like to re-fi to put a down payment on a multi family. I've been told I likely won't be approved for a loan after refinancing my primary residence.

Should I continue to save until I can afford the down payment or re-fi? If I re-fi, what are the chances I'll get approved/not approved for another loan?

Newbie asking for help!

Pull a HELOC on the primary and you can use it for a mortgage on an investment property with a private lender. I like the HELOC because you can use the amount you need and keep the rest of your equity tucked away in you home!

So I don't know what your financial situation is outside of these two properties and that will for sure impact your ability to get a loan, so make sure you have a strong position there. I'm also assuming you would rent out your current property when you move. If that's the case, present a signed lease when you apply for your re-fi. This will show the lender that it will be an income-producing property when you leave. Also, if you're not approved, just call on different lenders until you get one to approve you.

@erandi Lechuga

There's a lot going on here that needs to be unpacked.  Your situation could work, but the structure has to be right.

First, if you own a single family right now, most underwriters would be hard pressed to believe you're going to live in a multi unit property unless you're going through some life change like divorce or a significant job change where you have to move. If that's not the case, then set the purchase up like an investment property. If you have the equity, do a HELOC on the primary residence and then use that money for the down payment on the new purchase.

If you are going through some sort of life change and truly will live in the second property, then do a HELOC on your current home for the down payment, but be prepared to write a letter of explanation and provide some documentation for the life change.


@Erandi Lechuga To echo everyone else, Heloc is a great way to do it. To got a step further, I'm a huge proponent of a very specialized, 1st position Heloc that's tied to a zero balance sweep checking account. With that sweep checking account, all normal banking deposits are automatically swept towards your remaining balance, saving you interest until they need to go out to pay bills. 
It allows you to profit off your deposits not the bank, while accessing equity for 30 years, and saving tons of interest. You don't pay for that equity until you use it, and you can re-use it many times of the term to fund multiple deals. It's been an awesome tool for my investing. 

@Stephanie P.

Thanks for your reply!

No significant life changes, just trying to gather enough capital to purchase my first investment property. I heard this on a REI podcast too. Re-fi'ing suggest I plan on keeping it as primary residence since I'd technically be looking for a better rate. If I could stay in my primary AND heloc for an investment property I would much rather do that!

Originally posted by @Erandi Lechuga :

@Kenton LeVay

I read somewhere that I should go to as many lenders as I can in the timeframe of 2 weeks-ish to avoid my credit being impacted? Do I need to wait for one lender to deny me the loan before I go to the next lender?


You can shop around for a mortgage and it will not hurt your credit

Within a 45-day window, multiple credit checks from mortgage lenders are recorded on your credit report as a single inquiry. This is because other creditors realize that you are only going to buy one home. You can shop around and get multiple preapprovals and official Loan Estimates. The impact on your credit is the same no matter how many lenders you consult, as long as the last credit check is within 45 days of the first credit check. Even if a lender needs to check your credit after the 45-day window is over, shopping around is usually still worth it. The impact of an additional inquiry is small, while shopping around for the best deal can save you a lot of money in the long run. Note: the 45-day rule applies only to credit checks from mortgage lenders or brokers' credit card and other inquiries are processed separately.


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