I have a rental home debt-free. Does it make sense to refinance and use the cash to buy another rental?
My credit score is over 750.
Answers | 2
If you have the funds available to make the down payment on the new home, you'll probably get better pricing by taking out a purchase loan on it, rather than the cash-out loan on your current rental. Purchase loans are priced better than refinances, and cash-out refinances have additional pricing hits compared with "rate/term" refinances. You'll be making a payment in either case. If it's me, I'd take out the loan on the new property (presuming it's in good enough condition as is to obtain a mortgage). More questions? I write loans nationally, feel free to contact me through my profile.