Refinance 15 yr into 30 yr??

Question

Currently my house is on a 15 year mortgage but I was considering putting it back on a 30 year note to free up some cash for investing. Has anyone done this before? I know I will pay more in interest but with the extra cash every month I'm hoping to turbocharge my REI. Any thoughts?

Tammy Vitale · Answer

I have a property that I could only get a 15 year loan on because the dwelling was literally a shack.  We fixed it up for ourselves and then later (and now) rented it.  I refinanced to buy another rental and did it for 15 years.  And then I refinanced for 30 years because they'll now give me a 30 years loan on it.  Both times I took out equity for another house purchase.    My decision was based on letting my money work for me instead of just sitting there.  Also, I am older and if either my husband or I get sick we might not be able to refinance and then all that money is sitting there out of reach.  Now it's working for me in two other rentals that are making me good money.

Franklin Romine · Answer

@matt m.

How much per month will your cashflow improve?

Frank

Alexander A. · Answer

What is your current interest rate on the 15 year?  And what would the new interest be?

Christopher Cousin · Answer

@Mayes White Rarely ever is a 15 year mortgage more advantageous than the 30 year mortgage.  I do understand that the interest rate is typically lower for a 15 year mortgage, but if you can afford the note on the 15 year mortgage, you will actually pay the debt off faster by financing it on a 30 year amortization schedule because each payment would be an overpayment due to the lower monthly payment requirement for a 30 year mortgage.

Mike H. · Answer

Cash flow is everything.  If you have a boatload of cash sitting in the bank doing nothing, then no, I would probably recommend just keeping it a 15 yr because whats the point?

But any time you can boost your cash flow 800/mo or more, then you do it. Its not like you're giving up any equity really (a little maybe with the refi fees). But to boost your cash flow that much just makes things so much easier - especially if you're looking to add another house.

The more cash flow you have the more options you have when things come up.  Its the cheapest money you're going to get so grab it now while you can.

Patrice Penda · Answer

it makes sense to me

Mayes White · Answer

I know this is an old thread but I'm currently looking to refinance to a 30 year from a 15 year also on two of my properties. I'm currently cash flowing roughly $280 between the two of them. Refinancing to a 30  year will increase my monthly cash flow by $800 with the rough math I've done.

I want to purchase another property in Austin/San Antonio or Houston and looking to do so without tapping in my retirement accounts for the down payment.

Matt M. · Answer

I would be rolling a home equity loan in to it as well so overall I'm looking at freeing up roughly $800-900/month

Matt M. · Answer

current rate is 2.65% and the new rate would be 3.73%

Refinance 15 yr into 30 yr??

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