First time poster here. I was directed to this community because of a discussion I was having with a customer at work. I will be as detailed as possible.
My wife and I will be looking for a new home in the next 1-2 years. Probably looking in the 200-225k range on a 30 year fixed is the most likely scenario.
Our current home is a 15 year fixed rate at 3.5%. I believe I am about 3 years into this loan, my principal balance is $94,500. The home right now could sell for $150,000. With about 15,000 in updates I think it would sell in the $170,000-$175,000 range.
If we wait one year to buy a new home, and do not sink anymore money in updates into our current home we would have $60,000 or so in equity to put down on our new home.
I woke up in the middle of the night last week and for the first time contemplated keeping my current home as a rental. I think it would rent in worst case scenario break even with my current mortgage taxes insurance etc factoring in some maintenance costs. Best case scenario would probably be around $250 a month profit.
If that were the case, my plan would be to stockpile as much cash as I can to make a good cash down payment on our new home...hopefully somewhere in the $30,000-$40,000 down range.
I am just looking for thoughts, ideas, advice on this scenario. Can I refinance my 15 year loan to a 30 year to increase the cash flow?
I have a steady job, I keep an emergency fund and living expenses in savings that I am not even factoring into this, so the risk of two mortgages doesn't scare me in the least bit.
Thank you for any input.
