To refinance or not..

[Min Kim]

Hello everyone.

My wife and I are currently in TN and we have our primary home in WA now turned into a rental. We’ve owned the home for about 3 years now and it’s currently being rented out. Below are some info;

Original loan - $333k

Current loan - $320k

VA loan - zero down

Interest rate - 4%

Mortgage - $2000

Rent - $2500

Current value is $386k per my realtor

Possibly $63.5k equity

My question is, do you think it’s wise to refinance and take the cash to put into another rental property?

[Brandon Beaudoin]

Keep in mind with the $63.5k in equity you're only going to be able to tap into 75 to 80% of it because it's a rental.

Another option to consider would be to IRRRL the property since it's a VA loan and shave .5 to .75% off your mortgage. That will increase your cash flow (which already looks pretty good on the surface).

We are going through one now on our primary residence and saving almost $500/mo.

Only 3 requirements are: you lived in the property (ever), it's "seasoned" (210 days since last financed/refinanced) and you shave off at least 0.5%.