All Forum Posts by: Timothy Morales
Timothy Morales has started 2 posts and replied 5 times.
Post: 3rd mortgage too risky?
- Miami, FL
- Posts 5
- Votes 0
@Zach Wain Spoke with a lender today and he recommended the same. I’m looking at a Heloc of 140k (40k would pay off second mortgage) at 10.25% interest only payment for the first 10 years ($1100/month). This rate is likely going to keep going up with the way the FED is raising rates.
Second option is to refi the whole shebang at 7.25% and cash out 60k. This would raise my mortgage by 1.6k/month. The numbers just don’t add up to justify the risk. There’s so much uncertainty right now so I’m just going to sit tight and wait it out.
Quote from @Nathan Gesner:
Quote from @Timothy Morales:
I'm not a fan. If you were an experienced investor, I would recommend moving forward. As a beginner, I would avoid too much leverage, particularly in a peak market where things are more likely to go down than they are to go up.
Thanks for the advice, Nathan! I'll wait it out until the dust settles next year.
Post: 3rd mortgage too risky?
- Miami, FL
- Posts 5
- Votes 0
@Erik Estrada Thanks for your response. In that case I think I’ll hold off since my rate is way lower than what the rates are currently.
Post: 3rd mortgage too risky?
- Miami, FL
- Posts 5
- Votes 0
Hello everyone! I am looking to get started in real estate investing and need some sound advice. I bought my house in 2018 right before the market boom for 369k and did a cash out refinance in 2020 when the rates dropped. My house at the time appraised for 500k and I was able to take out 50k while also lowering my rate 2 points. The 2 subsequent mortgage payments combined now equaled my initial mortgage payment at the higher rate, so I essentially was paying the same but now had 50k in my pocket. I added impact windows and a pool with the money and also have a brand new metal roof thanks to an insurance claim.
Zillow now has my house appraised from 585k-646k which means I still have a substantial amount of equity I can tap into. My first mortgage is for 285k and second mortgage is at 40k which means I can take out 84k-127k (depending on appraisal) with a 70 LTV ratio. Is it too risky to do this on my primary residence and use this money for a BRRRR to pay off the 3rd mortgage? I live in Miami and don't foresee my house value crashing to the point where I'll be underwater and get margin called but crazier things have happened. Any advice will be much appreciated. Thanks!
Hello everyone! I am looking to get started in real estate investing and need some sound advice. I bought my house in 2018 right before the market boom for 369k and did a cash out refinance in 2020
when the rates dropped. My house at the time appraised for 500k and I was able to take out 50k while also lowering my rate 2 points. The 2 subsequent mortgage payments combined now equaled my initial mortgage payment at the higher rate, so I essentially was paying the same but now had 50k in my pocket. I added impact windows and a pool with the money and also have a brand new metal roof thanks to an insurance claim.
Zillow now has my house appraised from 585k-646k which means I still have a substantial amount of equity I can tap into. My first mortgage is for 285k and second mortgage is at 40k which means I can take out 84k-127k (depending on appraisal) with a 70 LTV ratio. Is it too risky to do this on my primary residence. I live in Miami and don't foresee my house value crashing to the point where I'll be underwater and get margin called but crazier things have happened. Any advice will be much appreciated. Thanks!