Can I refi 1 home to pay off another?

Question

Ok I have a few questions..

I currently own 2 homes and they both have a mortgage. 1 mortgage is at $39k and the other home is at $51k. Am I able to refi the home loan at $51k to $90k to pay off the other home? If so what are some things i would need to

Do and any guide lines?

I would say the house at $51k is worth around  $100k

Kyle J. · Answer

It is possible to do a cash out refi on a home and use the excess proceeds for pretty much whatever you want, including things like purchasing a new home or paying off debt (like another mortgage).

But what is it you are trying to accomplish? Is the rate on one of the mortgages really high?

One issue I see right away without knowing more information is that you'd have to pay closing costs on a new mortgage to end up with essentially the same amount of debt. Also, even if you could find a lender to do a cash out refi for 90% LTV (which it sounds like you'll need if you need a $90k mortgage on a $100k house), you're likely going to end up having to pay PMI. And that's if you can even find a lender willing to do it.

Chris Mason · Answer

@Logan Larochelle - SFR primary residence, Fannie and Freddie both have you capped at 80% LTV.

Logan Larochelle · Answer

yea there is a Lender in my area saying they don't charge closing cost I'm trying to get a better interest rate than the 4.75 that I have at the moment.. But I do know that no closing cost = higher interest rate most of the times but my credit is a lot better then before

I also have a pmi on the $51k loan that I would like to get rid of at the same time

Brent Coombs · Answer

Even if you find a 90% LTV Lender (with accordingly higher interest rate), you probably should wait until such refi would still leave you with 30% appraised equity in the mortgaged property. Cheers...

Can I refi 1 home to pay off another?

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