Need Help figuring out refi options I have for my current home

[Frank Kudlack]

Hey Guys,

I need help figuring out if I have any options I can pursue with my current house. I have a single 3/2.5 in a cookie cutter development about 20 mins outside of Philadelphia that we bought back in Nov 2009 for $264k. Well here we are today and this spring 2 houses on our street that are almost the same build sold for 195k and 200k. We want to move out of this house and buy a multifamily that we will live in and rent out the other units. Now while selling in this neighborhood seems to suck, renting them out is hot. Quite a few people rent out their house for 2k-2400. Renting is want we plan to do, but my issue is that we bought this house with a 5yr ARM. We were paying a good bit towards principal every month for the first couple of years but things got tight with job cut backs. Also it seems as much principal as we paid it depreciated that plus a little. So right now with our mortgage/ taxes and maintenance budget the rent range would cover all that and cashflow. But with interest rates going up I fear that while the numbers are good for this year that maybe next year or the following that the rate will go up and then we'll will be deep in the red. So I was wondering if there is any way to refi into a fixed mortgage with out us having to come to the table with a huge check that we don't have for the difference between the current loan and what we owe on it and the current house value? Also is there something else I can look into doing in this situation that I'm not even aware of? I'm open to anything that could lock down our rate so we could move on or even get us out of the house some other way. I just don't know how we can get our financial life back on track when we have what I feel like is a ticking time bomb in this mortgage. So I look to the BP community to send any guidance my way so we can keep moving forward towards financial freedom.

Thanks in advance-Frank

[Joseph Scorese]

Hi @Frank Kudlack,

Welcome to BP!

Going from SFR to Multi will change the LTV on the purchase for you since you already own the SFR. Unless there is a compelling reason other than a hot market. You are looking at usually 15% Down on the OO Multi Family with conventional rate not investment rate which is a great thing. An ARM could be an issue but this all depends on what the ARMS is based on Libor or ?. I have seen many clients stabilize with a 30 year due to the uncertain 2018 market. The 2017 market should be your 4 range throughout. Let me know if you have any questions.

Regards,

Joe Scorese