[USER]

Single family house with 2.8 interest rate. Bought it at 270000 and it’s now approximately 320000. Would you cash out refi right now. If not why?

Also looking for alternate options

[Derrek]

Don’t do a cash out refi. Do a heloc if looking to buy more real estate

[Tom]

While I do have a very small HELOC (primarily so I can write a check for home maintenance stuff), I would not do a cash-out ReFi.

It’s like starting all over on your mortgage in my eyes, plus you have the issue of needing income for the life of the new loan so you can pay it back.

[Jule]

Why would you take out money from your house at a high interest rate? Don’t get in the habit of using your home as an ATM.

[John]

WTF?!?
It makes sense if the math works for the 2nd property. But you need to do the math and somehow I don’t think it’s going to work with 2 properties with 6.xx% mortgages vs. the one current 2.8%.

Just do the math. What you pay per month now vs. what would you pay for the SAME property at say optimistically 6.2%? What’s the delta? Now do this same problem with the new loan amount, what’s the monthly?

How much can you rent it out for?

I’d do a HELOC assuming you run thru the math and can afford it if rates jump into double-digits.

The rate you have right now is sigma (as all the kids say today). You’d need a really good reason to give up that rate!

[Mindi]

What kind of question is this?? Would you step over a dollar to pick up a penny?

[David]

You’d be crazy to refi that 2.8%. Let that ride as long as possible. Heloc if you must pull some equity out. But there isn’t a ton of equity there just based on appreciation.

We aren’t given information about down payment or timeline to estimate pay down.

You might get someone to refi you at 70-75% ($224,000-$240,000). Is your balance significantly less than that?

[Dees]

It appears you want to buy another property and you’re looking to pull equity from your primary to fund that purchase.

I’m going to assume it’s because you don’t have the necessary cash for the down payment.

Since your primary is at 2.8%, you should only consider a heloc.

Now the question is, do you have the cash flow to pay for 3 loans, two of which will be at a rate near or above 7%? If the answer is a confident yes, then you have the means to save for a down payment.

So do that instead.

[Oleg]

u ll shell out around 10k to your realtor just to sell it plus u may have other costs and then ur gain is not great…your new mortgage will not be 2.8% either…

[Malicov]

This makes literally no sense. You have a super low interest rate, don’t give that up!

[Rob]

You don’t get the same rate when you do a cash refi! I have a 2.25% and no one can convince me to do a thing until we’re ready to sell.

Heck, even then I’ll have to make sure we’re really ready.

[Michael]

You would be insane to refi yours vs current rates. Just heloc if you need the money out.

[Van]

You are not eligible to do either with traditional financing. They will only give you 80% of the value for a refi or HELOC. $320k x 80% = $256k minus your $279k mortgage you are -$23k.

You don’t have enough equity to do anything unless you explore non- products which would be super SUPER expensive and even those most will not let you do it on your primary/homestead

[Author]

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