Hey folks:
My wife and I have owned and lived in a two-unit property for a little under two years. The area in which we purchased has continue to become more popular and prices have continued to rise. In a couple years we want to move into a SFH nearby and, ideally, retain the two-unit and rent out both units.
I am wondering if anyone has experience with a cash-out refinance of an owner-occupied two+ unit with the intention of using the cash as a downpayment on the SFH.
Is this advisable? A great strategy? Prohibitively expense as a result of fees?
***I am also trying to wrap my head around how a cash-out refinance works. I understand that I would be taking out a new loan (restarting the 30-year period) for an amount greater than my original mortgaged amount. For example (fake numbers), if the original mortgage was for $150,000 on a home purchased for $200,000 and there is $125,000 remaining on the loan but the home is worth $225,000 I would still need 20% equity in the house ($45,000) but could have access to around $50,000 in cash ((80% of $225,000) minus $125,000 owed). Is that right? I'd then be starting a new 30-year mortgage on $180,000 but have the ability to throw $50,000 into a SFH purchase.
