Streamline Refinance or Downpayment for Investor Property

[Yolanda Estrada]

Hello BP Forum,

My husband and I are new homeowners and new Investors as well. We purchased our first home a year ago but didn't have the 20% down payment because we wanted to pay off my student loan immediately among other things and are currently paying mortgage insurance (PMI) as a result.

We would like to make our first investor purchase this year but I wanted to know what is best. Should we do a Streamline Refinance on our home since the interest rate is much lower that the 4.125 fixed rate we initially took, take the $15,000 equity from our home and put it towards the 20% down payment to get rid of the PMI and have a lesser monthly payment or use that $15,000 towards the purchase of our first investor property? I was thinking to refinance anyway and leave the $15,000 equity as a down payment for the investor property but would love to hear your suggestions!

[Andy Mirza]

@Yolanda Estrada I was a little confused at to where the $15k was coming from until I read Shaun's post above. I agree with him. I doubt that you're going to find any lender in today's environment that'll do a 100% cash out refi. The only way you'll see that $15k is if you sold the property in which case it'll be less than $15k since you'll have to pay commissions and closing costs.

Do the Streamline Refi and start saving for that investment property separately. Good luck!