Wait to refi current home after acquiring new 3 unit?

[Geoffrey Davenport]

Hello there! 

New to BiggerPockets!

We are looking to invest soon for the first time into a multifamily property in Maryland. We plan to live in one unit and rent the other two. We have a mortgage on our current home. Mortgage interest rate is around 5 percent which we think we can get down to 3, considering the market.

Should we refi now before applying for a new mortgage on the investment property or wait until the dust settles on the new property? Not sure if that will make it harder to take out a new loan... We haven't started the process of looking for a home, we've submitted paperwork but are holding off on getting the pre-qualification. 

Any info or advice would be appreciated. Thanks!

[Stephanie P.]

@Geoffrey Davenport

Just a couple of points.

From what I understand, occupancy fraud is the #1 type of fraud in the mortgage industry.  If you refinance a property, calling it a primary residence to get the most favorable rates and terms, with the intent (that's the important part) of moving out within the 12 month's designated in your mortgage documents, you're committing fraud.

If you've moving from a single family residential property to a multi family property, most underwriters would question whether your intent is to move into it or just use if as an investor property and would probably, unless there are very extenuating circumstances, not allow you to get the highest ltv available.