Refinance Primary Home Affect My Next Loan to Buy and Move

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Refinance Primary Home Affect My Next Loan to Buy and Move

Jonathan Balos
Member since 2019 · 13 posts · 3 votes

Hi,

I refinanced my primary home last year (March 2019) to get cash out and buy an investment home which I did. The rate I got was 4.25 which was decent at that time. 

Would it be wise to refinance and get some more cash out and lower the rate? I was planning to move shortly and keep this and rentit out and buy another primary home however I am wondering if me getting a new refi would affect the new primary home loan? Does it affect my chances to get a good low rate esp. since my greatest concern is DTI and how the new loan would affect that.


Thanks in advance for any insights!

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  • Jody Sperling
    Omaha, NE · Member since 2020 · 611 posts · 665 votes
    6y

    Have you considered a HELOC? As long as you have 20% equity in your primary, the HELOC would give you more spending power, and in the meantime you could use it to attack your principle owed on the current house, reducing your DTI.

    Check out the WiseGuysInTies video on velocity banking if you want a crash course in using lines of credit to pay down a mortgage fast. I think it would accomplish everything you want without you having to sacrifice thousands of dollars to a refi for a bit of cash and a lowered interest rate, positioning you perfectly to buy a new primary and rent the current primary.

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  • Jonathan Balos
    OP
    Member since 2019 · 13 posts · 3 votes
    6y

    Thanks Jody. I have considered a HELOC but my main goal for this house it to keep this house for many years at a really low rate. I have cash reserves to make a down payment on a primary home however my primary concern is how me getting a refi or even a HELOC would affect my bankability on getting another loan in a couple of months?

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  • Jimmy LieuBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
    6y

    If you did a cash out refi in 2019, how much would the property have appreciated for it to be worth it to get another cash out refi a year later? Are you able to provide some numbers?

    And yes, I am pretty sure if you do another cash out refi, you would lower your DTI because your mortgage will end up being higher (and you don't have any rental income to offset it) since this is your primary home right now.

    [email protected]614-300-7535
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