BRRR in the midst of interest rate jump

[Dave Messier]

Hi guys, long time listener first time caller. I have a BRRRR with my sister in Roxbury, MA. We purchased it in Nov 2020 for $770k, my sister did a fantastic job on the remodel it instead of the 12 mo timeline we had aimed for it took 18 mo. Now as we're refinancing rates have gone up a full 2 percentage points. We have a $587k mortgage for 30 years at 2.85% interest since this is her primary residence and don't want to lose that - though the plan is for it to be a full rental after she lives there for a year. Appraisal looks like it will come in at $1.5M or more which allows us to get our cash back out BUT the best rate we can get now is 4.9%. Is there any product out there and lender who would refinance over our existing mortgage? I don't want to lose the $585k or so at 2.85% interest bc i don't think we'll ever see those rates again, but we DO want to get our cash back out of the deal so we can reinvest elsewhere. Any suggestions?

[Bonnie Low]

We've become addicted to cheap money. 4.9% is still a KILLER interest rate. People who haven't been buying and selling real estate outside of the last 10 years just don't see that. If you can lock in 4.9 for 30 years, I'd do it. Many people smarter than me also believe that because we are so addicted to cheap money (we being the economy as a whole) interest rates are likely to float back down when the fed and bureaucrats realize how hard rising interest rates slow down the velocity of money. So perhaps you'd only be at the 4.9% rate for a year, 18 months, 2 years? Who knows. Point is you may be able to refi back down if interest rates do come back down in the near future.