cash out refi a good deal?

[Steve Pickenpaugh]

Hi guys hoping to get some feedback on an offer from TIAA for a cash out refi on my residence. It looks expensive, especially closing costs. I'm trying to position myself to have as much cash on hand as possible in the near future in order to purchase buy and hold rentals. Specifically house hacking a duplex or quad and renting out my residence. Both loans are conventional so no FHA to deal with. If rents don't crash ,my residence would basically break even after the re-fi and higher mortgage payment. So would consider selling depending on market and value. Some questions I have are : do you think values are going to tank and I should eat the expense to capture my equity now or should I just work with the capitol I have now ? Approx. $20k. Will banks tighten up lending so much I won't be able to get a loan anyway? My credit score 808 so shouldn't be an issue? Should I wait to see if interest rates will go down more or it's low enough now , do it? I currently still have 3 months cash reserves for my personal bills after this pandemic crap hit the fan. My wages have currently been cut by%50(auto mechanic) but wife's not affected .No credit card balances or other "bad debit" other than 2 auto payments...

Thanks in advance

Unfortunately the document has a confidentiality notice so I won't link actual doc. Here are the numbers:

Loan Amount :$132,000  (I currently owe $102,605 on mortgage)

Interest rate 3.85%      (current mortgage 4.625%)

Monthly P&I : $620.71

Estimated escrow :$377  ( may actually be lower, paying $349 now)

Estimated monthly payment $998 (currently paying $894)

Estimated closing costs $10,555  (includes $6226 in loan costs, + $4330 in other costs)

Estimated cash to close $18,840 (cash out to me)

Closing cost details :Origination charges $2,000                       

              .687% of loan amount (points)  $907    

          Document review fee to attorney $100       

                      Lender origination charge $995     

* costs I cannot shop for Total  $1,469  appraisal fee, title endorsement etc.

*costs I can shop for Total  $2,754  survey fee$550, lenders title insurance$1,429,Title settlement fee $775

and some miscellaneous taxes and transfer fees...

[Daniel B.]

@Steve Pickenpaugh

@Steve Pickenpaugh

Ok, not familiar with Texas law. I would never recommend paying $10,000 (closing costs) in order to get $18,000 (amount due to you). Typically they estimate closing costs high, but that’s really not even close to making financial sense. I’m assuming you would actually be out the $6,000+ in loan costs and other costs are things like taxes and insurance escrow (your old loan would pay you back your escrow balance on that would be closed loan within 30 days), but still not worth paying $6,000 to get access $18,000....

If you can just refinance to a lower rate with little to no closings cost, I’d look at that then save cash over the next year plus...