Refi or keep current

[Joanne Gonzalez]

I bought my primary June of last year. Showed in my credit and it was $169,750 loan, 5.4 APR, $1,139 monthly payment. Due to some circumstances I had to refinance and because I was renting it out I had to refinance into a investment property. New loan as of June 2023; 135k, 9.25APR, $1,261.50 monthly Does have a potential 4,995 penalty and does not show on my personal.

I am able to refinance through a credit union with a loan amount of $134,788, 7APR (5Year-ARM), with an estimated monthly of $896.75. Will possibly show on my credit and still an investment loan.

I feel like it's the right decision so I can make more of a cash flow. Usually rent it out between 1750-1800 (all Utilities included). Refinancing it will allow me to keep it at this amount or possibly even lower it to be more competitive. But I'm stuck in between whether I want it to show on my personal credit report or not I'm not sure if that's a good decision. I currently want to purchase another home as an investment whether it's a DSCR loan or 20% down for a conventional, but I don't want the mortgage to affect me. What would you do?

Side Note: I do want to buy a primary in the next 4-6 months in officially house hack the right way.

[Erik Estrada]

Quote from @Joanne Gonzalez:

I bought my primary June of last year. Showed in my credit and it was $169,750 loan, 5.4 APR, $1,139 monthly payment. Due to some circumstances I had to refinance and because I was renting it out I had to refinance into a investment property. New loan as of June 2023; 135k, 9.25APR, $1,261.50 monthly Does have a potential 4,995 penalty and does not show on my personal.

I am able to refinance through a credit union with a loan amount of $134,788, 7APR (5Year-ARM), with an estimated monthly of $896.75. Will possibly show on my credit and still an investment loan.

I feel like it's the right decision so I can make more of a cash flow. Usually rent it out between 1750-1800 (all Utilities included). Refinancing it will allow me to keep it at this amount or possibly even lower it to be more competitive. But I'm stuck in between whether I want it to show on my personal credit report or not I'm not sure if that's a good decision. I currently want to purchase another home as an investment whether it's a DSCR loan or 20% down for a conventional, but I don't want the mortgage to affect me. What would you do?

Side Note: I do want to buy a primary in the next 4-6 months in officially house hack the right way.

 Hey Joanne, 

Whether or not the DSCR loan shows up on your credit report, you still need to disclose the debt to a lender.

You might want to consider the closing costs from constantly refinancing. When will you breakeven factoring in all the costs? It seems too soon to consider refinancing again.

If you plan to purchase another investment property with a DSCR loan, lenders will not factor your personal DTI to qualify. Rates will be higher than a conventional loan, however, you have that flexibility to keep buying without considering your personal DTI.