Cash out refi current primary to finance future primary

[Bala P.]

Hello all,

We have some equity in our primary residence so thinking about refinancing with cash option and using that money as down for the second house. Currently we are on a 15 year term with 11 some years left and thinking about going 30 years. The current rate will be attractive down the road and hopefully generate some cash flow. I can lock in the 30 years with the same rate we are paying currently.

If I start to add the difference in the monthly payments between a 15 and a 30 year towards the principal and continue paying the same way, it will be paid off in 15 years and 11 months. I just did this to see the difference but will pay only the minimum required to reap the current interest rate benefit.

The current plan is to convert the current residence to a rental and make the second house as the primary. This would get me started with my goals to buy and hold. I know exactly the condition of the property and the things that are nearing their end of life. Also hopefully the second mortgage will be a primary residence loan, which I am not sure. My questions are

- anyone see anything wrong with strategy?
- if I refinance now, how long should I wait to acquire the next house?
- with an exising lien on the current home what should I expect from the bank when I apply for the second home as a primary residence?
- every book,blogs and thread I read says never buy the rental as if you will be living in it and I am going against this rule. Anything wrong with it?
- really don't know how much dent will the refi cash out create on my fico?
- if a big dent, would the second home rate sky rocket?

Thanks in advance and just wanted to get the experts opinion before I make any damage.