Refinancing and leaving a 3.5 fixed rate behind

[Jorge Garcia]

Have refinancing rates gotten better or is it recommendable to wait until next year to see what happens? I want to start a business and I want to use that money towards it. However I got this property locked in a fixed 30 year 3.5 rate and it hurts saying goodbye to it. Are there any banks doing refinances with some good rates at the moment? Just need a little insight from someone that has done it recently or know about this topic. Thanks ..

[Chris Seveney]

@Jorge Garcia

I would look into bringing on a partner if possible or getting a different type of loan than refinancing your home

Have you also looked into a HELOC as well so you can keep your first mortgage ?

[Kerry Baird]

This is one of those situation where the HELOC on your primary residence would be easier to get, especially while you have excellent credit scores. Going forward with the business, aim to never use your personal credit, but aim to use business credit. My experience was getting my personal credit utilization high as I bought product for my business, and subsequently my FICO went low; therefore financing was increasingly difficult. I had to learn about business credit after the fact, and retrench. I recommend you plan for this in advance. :D

[Amber Stout]

@Jorge Garcia I am a lender working mainly with investors and am happy to run numbers for you on a cash out refinance.

Alternatively, you can do a HELOC. I have two local contacts that can do 100% LTV on a primary home and another contact that can do a HELOC for an investment property.

If interested in either or, send me a DM - happy to discuss both options and share my contacts with you so you can determine what's best for you. 

[Steve Cooper]

Hello Jorge,

Hope you are doing well. I agree with the other suggestions that perhaps a HELOC would serve you better. It offers more flexibility and you're only paying back what you use.

Another alternative would be a business line of credit. This would not be a lien against your home, rates are good for the first year and then increase. Let me know if you have any questions.

[Connor Hibbs]

Hi Jorge,

A HELOC may be your best option on this one as you won't find anything close to the 3.5% rate that you've got. Something to keep in mind as well would be if there are any prepayment penalties on the existing loan that you've got as that would cut even further into the funds you'd be looking to take out. If you'd like to explore options, I'd be happy to help, but HELOC seems to be the best route for you here.

[Zach Wain]

HELOC!

[Ned J.]

No way I would refinance off at 3.5% loan...... not going to get anywhere close to that... do a HELOC or another LOC.

[Brittany Minocchi]

HELOC or HELOAN. Both second position so they won't mess with your current rate. HELOC is a variable rate line of credit (so you only make payments on what you have drawn), HELOAN is a fixed rate lump sum loan (similar to your first mortgage). You won't find lower than a 3.5% on a cash out refinance right now.