Austin TX House Hack Questions

[Nick Anderson]

Good morning BP community.

My fiancé and I are going to be purchasing a duplex owner-occupied property in Austin, TX this Fall. A few questions I am looking for some advice on from this community.

1. 1.) Currently considering an FHA 3.5% loan versus using a HELOC on our current property towards a 15% down conventional. Our price range is 450K-550K. The 1.75% upfront PMI and .85% annual PMI with the FHA is not at all appealing to me. I think a refinance to a conventional loan in 2-3 years after purchase date would need to happen. Does anyone have experience with this? What are your opinions on my thought process here? Iron sharpens Iron!

1. 2.) We are planning to rent out our 78749 SFH after we move into the duplex. I'm confident we have 20% equity in it after some reno and appreciation this year. Would it be best to refinance prior to moving out so that my lender still sees this as our primary residence? My lender told me that if I refi while we have renters in, the home would be seen as an investment property and interest rate would automatically go up .5%. Would this happen anyway if we moved to a new unit, regardless of when we refinance?

1. 3.) My lender mentioned that underwriting will question why we are moving to a smaller place, and it needs to be justified. Is "getting married" an acceptable justification? What are other justifications?

1. 4.) I feel confident with our realtor and we are going into it knowing that this process could very likely take 3-6 months to find the right deal on the MLS. Being said, should I be looking into other avenues to find deals off-market? It's clear that it's an uber competitive market and we don't have too many resources to build a deal filter at this point. Any advice here is welcomed.

Thanks in advance for any insight! First post on BP forum though I have been reading for years.

Nick