Cash out refi advice

[Nneka Keshi]

I am a buy and hold investor and have just been saving up my 25% down payment and purchasing. However it has become harder to find a good deal in this market. So I decided to look into refi to get a lower rate.

My properties have appreciated quite a bit and I now qualify to take out an amount that will amount to the cash I put in for 2 of my investment properties, however my monthly payment will go up on the one property but it will still cashflow just much lower maybe $150 cashflow.

So I am thinking should I pull the funds out and keep it ready to be able to buy a new property in case something comes up, taking the money out effectively makes my cash on cash infinity like the Brrrr strategy but downside is it will reduce my cashflow. Or do I keep my cashflow as is and just continue to save up the down payment which takes a while and may miss some deals because I don’t have the downpayment available.

appreciate the feedback

[Dan Schwartz]

@Nneka Keshi why would the lender suggest you recast your mortgage(s)?  Did you say that you were interested into pouring the money you’ve saved into an existing mortgage so that you could recast it?

That recasting came up suggests to me that you and the lender are not on the same page with regard to your goals.  

Recasting neither lowers your interest rate (one goal you mentioned in the original post), nor provides you with any new cash to purchase more properties (another goal of your original post).   

If you told your lender, as you told us here, that you were interested in lowering your interest rate and increasing your cash position….and the lender replied “welp, maybe you want to recast your mortgage,” I would be looking for a new lender.   But be sure that you have been clear with your lender about your goals.