Creative Real Estate Financing
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback
Updated almost 2 years ago on . Most recent reply
Newby Thinking About Cash Out Refinance
Hi there, hoping you smart people can help me play out a scenario. We currently own our home out-right and it's worth about $450k. Last year we purchased a short term rental property with two loans. The first loan (30-year fixed) we owe $179k and it has a 7.375% rate. The second loan (15-year ARM) we owe $74k and it has a 6.875% rate. We want to purchase a new primary home and long term rent our current primary.
Would it make sense to do a cash out refinance on our current primary home that is paid off completely and (1) use the cash to pay off our short term rental loans and (2) use the cash as a down payment on a new primary home we want to move to?
We have excellent credit and I believe we could get a ~6% rate on a new conventional loan. Are there any tax implications or concerns with this strategy? I really appreciate your thoughts and insights!