All Forum Posts by: Drew Morton

@Jeremy Horton I haven't received any quotes yet. Wanted to determine best long-term route before getting these.

@Marcus Auerbach I was leaning this way as well and it makes a lot of sense for low mainenance, long-term.

Thank you both for your responses! I'll most likely be going the patio route.

I am in the process of rehabbing my house that I am currently living in to later rent long-term for top dollar in my area. All interior work has been completed and now I’m working on the exterior. The back deck is falling apart and was not built to code. One corner isn’t being supported properly and is sinking, the floor boards are separated way too far apart, joists/beams are rotting, and a few other issues. This said, it is about 3 feet off the ground and I haven’t personally felt unsafe on it but would have more of a concern if a large group was on it at one time, especially in the corner that isn’t supported properly.

From what I can tell I have 3 options:

#1:  Repair the deck.

#2:  Build a new deck.

#3:  Replace deck with a patio

With money being a constraint, but willing to pay what it will take for the best long-term fix, what option makes the most sense?

@Todd Jones Thanks for the reply! I am leaning towards the 6.625% 30 year and just sucking up the closing costs.

@Jaron Walling My strategy was always to rent it out and keep it for a long time as it's in a very good market of Birmingham, AL with a great school system and appreciating area. I purchased the property with tenants already in the home which is why I didn't renovate right away. Once the tenants left is when I did the renovations and decided to move in myself for 1-2 years since the timing made sense when I needed a place to live myself anyways. I plan to rent it back out probably around this time next year.

HELOC was paid down primarily from my w2 income, plus some side gigs including one property I sold as an agent.

The changed the layout from a 3 bed 1 bath to a 2 bed 2 bath due to only being 950 sqft. With tiny closets and a shared bath, it wasn't likley I could find 3 people willing to rent the house. A two two just made more sense. The 3rd bedroom is now the master bath and walk in closet. Living room and kitchen were separated by a wall and now an open layout with island. Added about 50sqft as non HVAC space where the laundry is now vs being in the kitchen previously. It isn't over renovated as a lot of houses in the area are being renovated similar.

@Jay Hurst

1. Credit score upper 700s

2. $325k

3. long-term

4. conventional

I am looking for some advice on how to proceed with my current situation. 

Back story:

I purchased my first and only investment property in 2017 using a 30 year conventional loan with I believe around a 5% fixed interest rate. In 2020, I decided to refinance due to the low rates and got what I’m now considering some not so good advice to get an adjustable rate which ended up being around 3.2%. As you can imagine this decision has been eating away at me now that my interest rate has moved up to 8% today.

In 2022, I decided it was time to renovate the house as it was in need of major renovations. I was able to get a HELOC for $70k on the property to help pay for renovations that extended through Q3 of 2022. I have since completed the renovation and also just finished paying off the HELOC. Since completion, I decided to move into the house rather than rent it out so I can continue doing some small things to get it ready to rent for top dollar in 2024.

Options:

Now that my focus is away from paying off the HELOC, I am trying to determine if I need to refinance once again to get a fixed interest rate since my adjustable rate is tied to prime and most likely will continue going up. I have reached out to a mortgage professional to get a couple refinance options. He mentioned I should do this now and unfortunately will probably want to refinance again in a couple years assuming rates drop. Here are the options he provided:

1) 15 yr conventional fixed rate of 6.25%. Estimated closing costs = $4,600. Total loan amount = $125,000.

2) 30 yr conventional fixed rate of 6.625%. Estimated closing costs = $4,600. Total loan amount = $125,000.

Questions:

1)  With an existing loan balance of $116k, do I refinance or sit tight and risk interest rates to continue increasing?

2) If I do refinance, do the options I was provided appear to be consistent with what to expect right now regarding the rate and closing costs? 

3) If refinancing is my best option, would you take the 15 or 30 year?

Thanks for the help!