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Updated almost 4 years ago,
steps to refi residential loan on duplex no longer OO
Hey team,
Old new investor here. I purchased my first and only property (a top/bottom duplex in Echo Park area of Los Angeles) back in 2018 with the intent of house hacking. I obtained a Jumbo residential loan at 4.25% for around $730k. The purchase price for the duplex was $1,032,000 and I had a sizable down payment and also put in around $100k into bringing it up to speed. I moved into the top unit and rented the other for $3k. After a year I moved out into an apartment closer to work for $2k and then rented out my unit in the duplex for $3k. Things have gone well enough so far, consistent tenants, the cash flow has been enough to cover expenses and stock away a stash for larger repairs.
However... the rates for refi right now if I understand things correctly would take my loan from $3,500 down to potentially $2,400 which obviously would be huge. I do not believe I can get a residential while not living in the building at this point but as fate has it one of the units is opening up and I am thinking it would be a good idea to move back in so I can legally refi as a residential loan.
My long term goal is to hold this property long term and eventually leverage to buy further properties but not necessarily live in it any longer than I have to in order to conform to loan expectations.
Questions are...
1. Are my basic assumptions around the value of this refi correct?
2. How long do I need to be back in the unit before I can apply to refi?
3. What proof will I need to provide to establish this?
4. Any suggestions as to where to go for this type of refi or specific products I should look into?
5. Are there other refi options without moving back in that would make sense as well?
6. LA real estate feels to frothy at the moment, but would it maybe be wise to use this moment to do a cash out refi to leverage the value add I made after the initial purchase and use it to add something else to my portfolio?
Thank you everyone!
~Michael