Cash Out Refi on Primary Residence or Rental?

[Jimmy Au]

Hi BP fam!

Let's say you own 2 properties free and clear. One is a primary residence and one is a rental property. Which one is the best to do a cash-out refi on? At this point in time, I only want to refinance one (I enjoy living for free lol). I understand primary residence has better interest rates and I can pull out 80% LTV but is there anything else I need to know? Any tax implications? TYIA!

[Jesse Hinaman]

@Jimmy Au need to know loan balance you’d like to pull out to be able to intelligently answer your question regarding tax benefits. Also, what’s your filing status (single, head of household, married filing jointly).

With the doubling of the standard deduction, itemizing your interest is not as valuable as it use to be.

[Brian G.]

@Jimmy Au if it was me I would rather refi a rental than my primary irregardless of interest rate, LTV and tax consideration. My primary would be the last thing I put at risk unless you have no intention of living in your primary longterm (ie 5+ years). If that's the case then see where the math and numbers take you as you compare both options. It's a great puzzle to have.