Hello all! First of all I love this site and very thankful for the discussions, books, and podcasts that I have delved into this year. I am new to the game and trying to educate myself as much as possible this year.Question for anyone willing to give advise:
My wife and I bought our first house in Hampstead, NC this January. The loan had a second loan worked into it which is offered in NC for first time home owners. $8k free money with no interest, which can be used towards closing costs. You never have to pay it back UNLESS you sell or refinance before the the 15 year mark of the loan, 2035 in our case. If we are all still here the way this year is playing out :)
Our intention is to rent the house out and buy a new home either next year or the following year depending on what the market does. Right now it would not be a cash flowing property with all factors worked into it (repairs, vacancy, ect). Long term it would be break even at best based on other homes rental rates in our area. Our loan is 30 yr at 4.375 and I am wondering if we should refinance for a rate closer to 3% and save money in the long run and give us more cushion when we do rent it out to be in the positive. We would have to put about 6k down now and work the 8k into the new refinanced loan. This would delay us a little while in the purchase of a new home just because of the lost cash.
What do you think? Refinance to get slightly in the green as a rental, and delay the purchase of a new home, which would become a rental in the future, or leave as is and keep the cash towards future down payment?
