Author Topic: cash out refinance to lock in low rates?  (Read 330 times)

name_was_taken

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cash out refinance to lock in low rates?
« on: July 10, 2020, 12:43:12 PM »
What are eveyone's thoughts on doing a cash-out refinance on a primary residence to lock in the current low rates?

Our details:
29 y/o, married, 1 kid. No rentals. ~150k gross combined income. Stable jobs. Low expenses. $600k in retirement accounts, no other investments or properties.

House - $40k and 5 yr left on a 10yr mortgage at 2.95%. We've remodeled extensively and the house is valued at ~$180k now. So, if we did a cash out refinance, we could take out ~$100k and keep a 80/20 LTV ratio to avoid PMI.

I don't need the money for anything. The main incentive would be to lock in the current low rates to put toward rental property downpayment when a deal pops up. It would be conservatively invested in a taxable account in the meantime.

August26th

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Re: cash out refinance to lock in low rates?
« Reply #1 on: July 16, 2020, 01:24:35 PM »
If your goal is to purchase a rental property, it sounds like a good idea. You should be able to get a lower rate than the 2.95% you already have, so that is super cheap money.

It also depends on your own philosophy and where you land on the DO pay off your mortgage/DONíT pay off your mortgage discussions. Lots (and lots) of debate on that topic here on the forum.

srad

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Re: cash out refinance to lock in low rates?
« Reply #2 on: July 16, 2020, 03:58:58 PM »
The rates right now are pretty amazing.  If you are planning on buying some rental property i would say go for it too.  Having the cash in the bank makes being able to buy a rental that much more real.  But if you are on the fence about owning rentals, i'd hold off.  I'm not a fan of using the equity from my properties for anything other than more properties...

I just started the process of refinancing all of my mortgaged rental properties.  30 year rates are 3.25 (SFR) and 3.35(duplexes).  Wow, i'm coming from mid 4's, the amount i'm saving is going to be noticeable.  I also got a quote for my primary home mortgage at 2.75, i don't plan on staying here too much longer otherwise i'd jump at that one too.