Types of Refinancing options.
Hello all I'm trying to figure out my next move. In 2020 I purchased a 1 bed & 1 bath condo and I have interest in pulling out the equity to use it to acquire another property to move into. The plan will be to then rent out my condo. Does anyone have any personal experience when it comes to refinancing their properties? If so which did you select and why?
Hey Brandon. The goal is to pull out as much equity as possible with the smallest monthly payment so you can cash flow on your rental.
Depending on what kind of rent you think you can get will change your options. Many people are opting for HELOCs or HELOANS because they have 3% mortgages and don't want to touch them. This can be a great solution but you need to fully understand what type of 2nd you're getting so you don't screw yourself down the road. If you have a great rate on your 1st, I would look at these options. If you don't, or if you are still paying MI, then maybe you'll want to consider doing a standard cash-out refi.
Thank you so much Rob for the information.
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Quote from @Brandon Trotter:
Hello all I'm trying to figure out my next move. In 2020 I purchased a 1 bed & 1 bath condo and I have interest in pulling out the equity to use it to acquire another property to move into. The plan will be to then rent out my condo. Does anyone have any personal experience when it comes to refinancing their properties? If so which did you select and why?
This sounds like a different situation than a "BRRRR" strategy refinance question - however, this article published here on BP last year goes through a lot of the different refinance options on the market for investment properties.
https://www.biggerpockets.com/blog/brrrr-loans-what-are-the-...
yesss you'll want to run the numbers on a few different scenarios: 1. doing a cash-out refi (new loan amount, new rate), 2. doing a HELOAN to tap into your equity... and actually, 3. selling the property and doing a 1031 into a bigger asset that will cashflow better. condos (when doing LTR) rarely cashflow much if anything. find an investor-friendly loan officer that can help you figure out which path is right for you!
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@Brandon Trotter just like how you got "prequalified" to purchase your home you can also get "prequalified" when it comes to refinancing too. A good loan officer should be able to show you different options that you would qualify for. That's what I would suggest so you can see what options you specifically have for this property.
Hope all of that makes sense.
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