Refinance with cash out??

Question

Should I lower my mortgage payment by  refinancing or refi with cash out and wait for an opportunity for future investment possibilities? and emergency fund?  Unsure of economy and whether I will have a job to raise my mortgage payments. Should I play it safe with a lower payment or have close to my same payment with some cash out for possible investing in the future?  If I take cash out, the bank will raise my rate a bit...I want to play it safe but in 2008 I had no cash and missed TONS of deals!  Help!

Collin Chan · Answer

+1 To what Jared said.  It really depends on your motivations and goals.  Of all my neighbors within my close culdesac we have discussed this exact thing.  Out of 5 of us, I was the only one to do a cash out refi to the max value I could pull out.  All others either went to a lower rate in either a 15 year fixed from a 30 year fixed or kept a lower 30 year fixed.  All of us agree that this year will be a great time to invest but each has their own goals and investment strategies as well as current financial status.

Being here on Biggerpockets, the assumption is that you want to build your real estate wealth so that would mean if you can leverage your personal residence to pull out equity, it makes sense.  However, you do cite that you have concerns about future employment so that would be something to evaluate.

If you do a cash out refinance, keep in mind the market values might go down in the near term so it's best to do sooner than later of course mortgage rates crept back up with the flood of people refinancing the past month but is expected to go back down.

Jared Rine · Answer

@Gayle Eisner..only you can answer that question.  I, being a mortgage broker/lender, feel that having liquidity right now is key and there are going to be opportunities with what's going on, even after the dust hopefully settles here soon.  The affects and ramifications are going to be felt and I believe there will be opportunities.  I wasn't ready at all the last go and also wasn't in this business, but I'm looking be in a position this time around.  Just my $0.02.