Refinancing. Does it create more debt? And if so, how is it good?

[Sundiata Atiba]

Is refinancing creating more debt?

[Lynnette E.]

Originally posted by @Sundiata Atiba:

Is refinancing creating more debt?

Yes, refinancing creates more debt.  This debt is also at a higher interest rate than a conventional home loan.  However it is less than a private loan would cost.  It also costs a lot in fees to refinance which adds to the cost to access money through refinancing.

I personally do not refinance my properties as my goal is to won less 'doors' but to own my 'doors' free and clear of debt.   

If you want to own a lot of 'doors' and do not have much money, refinancing allows you access to money to buy the next door.

You need to look at your goals.  Is your goal to have lots of doors, even with lots of debt, and little income per door?  Is your goal to own doors free and clear of debt, but own less doors, even if your income per door is more (because you do not have to pay for a mortgage).  If you go this route, you may have to save a long time to get the money to buy the next door.  You need to develop your strategy.