How to go from House Hack #1 to House Hack #2

[Bryant Sala]

Hey there! My wife and I got into our first house hack last year, a duplex in Cincinnati. We're trying to decide how to logistically go from this first one, to the next duplex/fourplex. We want to refi out of FHA and into Conventional, so that we can re-use the FHA - but is now a good time to do so? With rates around 6-7%? Or should we wait a few more months to see if rates come back down to Earth?

Also, are there lenders that do no-cost refi's? Is that common?

Thanks in advance!

[Kenny Smith]

@Bryant Sala

I'd definitely agree with Devin you should definitely not re-fi right now into a higher rate.  Protect that interest rate you currently have.  

If you want to use the FHA loan again, I'm assuming it is because you only have to put 3.5% down? If that's the case, a conventional loan, you can put as low as 5% down. Yes, it's an additional 1.5%. But, look at it this way, you'd be paying almost double the interest rate if you re-fied right now. Off the cusp, I'd say it will only take 1-2 years to pay the equivalent of that 1.5% additional down, in a higher interest rate. So if you're doing a buy and hold, I wouldn't touch the rate.

If you want to pull equity out, I'd take a look at a HELOC.

As far as I know, most lenders will charge for a re-fi, but you'd to double check with some lenders on that.  Typically what they do is wrap the re-fi costs back into your loan, so you're not paying for anything out of pocket up front.  Besides paying for the re-appraisal on your home, that will come out of pocket.

Best of luck!