The devil is in the details. The details that are pertinent in this case are:
1. What are you going to do with the money in the short term? Park it in a CD?
YES-
2. What’s the total amount of loans you’ll have out? $600-700K + current balance?
180K @ 4.75%X15 YR WITH 40K @ 8.75% HE LOC LOAN (ON PRIMARY HOME)
130K @ 5.3% X 30 YR SECOND HOME
3. What’s the rate you’ll qualify for on a cash out refi? Cash out refi’s are usually higher than regular mortgages.
BOTH LOANS 30 YR FIX @6.3/8 1 POINT FEE (GREAT CREDIT SCORE)
4. How much time and capital is left on your current mortgages?
PRIMARY RES. 8 YRS TO PAY OFF APPRAISAL @ 525K
SECONDARY RES 27 YRS TO PAY OFF APPRASIAL @ 425K
5. How does your debt load with the refi compare to your current income?
PRIMARY+ EQUITY LOAN= $2,400.00/MO NOW. WITH REFI=$2,800/MO
SECOND HOME= $1,100/MO NOW. WITH REFI+ $2,800/MO
I THINK I WOULD OPT TO USE SOME OF THE BORROWED REFI MONEY TO COVER THE INCREASE IN MORGAGE EXPENSE.
Other options may include refi-ing one house and using it to completely pay off your primary residence. You still get the tax deduction of the current loan amount, however one house is no longer subject to a loan and mortgage lien.
