All Forum Posts by: Stephanie Joe

Hey Stephanie!

You can do both at the same time, but you wouldn't be able to do it both as a primary residence.  Once you buy another home as a primary residence, you would need to refinance the current home as an investment which would have higher rates.  Depending on your time frame, refinancing the current home first as a primary residence and waiting to buy another primary residence would be the way to get the best terms.  If it's more important to get another home first, then go ahead and do that.  Just know the refinance will need to be done as an investment if done after the fact.

@Stephanie Joe, you're in an exciting position with a new construction home on the way and a potential rental property in the mix! Here's a breakdown of how you might approach your decision:

1. New Loan vs. Refinance: Securing the loan for your new home first could be beneficial, especially if you're planning to rent out your current home. Many lenders will allow you to count future rental income as part of your debt-to-income ratio, which might make it easier to qualify for the new loan. This could help you secure a better deal on your new mortgage, especially with your strong credit score (780+).
2. Current Market Trends: Rental prices are in a bit of a flux right now. While some markets, especially in tech-driven areas like Austin, have seen a drop in rent prices (down 5.6% year-over-year in Austin as of May 2023), other areas are still experiencing steady rental growth. This may impact how much rental income you could expect from your current home​.
3. Concurrent Loans: It’s definitely possible to refinance and secure a new home loan at the same time. Several lenders offer programs designed to help streamline the process. However, you’ll want to compare closing costs and ensure the timing works with your home’s construction schedule.
4. Refinancing Your Primary Home: With your current mortgage rate sitting at 6.75%, refinancing could lower your monthly payments significantly, especially if you can lock in a lower rate. On the other hand, if interest rates are expected to rise, you might want to prioritize the new home loan before refinancing.

I recommend speaking with a mortgage broker who can provide specific advice based on today’s rates and your long-term goals.

P.S.: If you're planning to rent out your current home, keep in mind that many landlords in 2023 are adjusting their rent expectations due to a shift in market dynamics, with vacancy rates creeping up as more rental units come online​(. This is something to factor in when setting your rental price.

Good luck with your new home and feel free to ask if you have more questions!

@Stephanie Joe it should just be a simply written out letter on his letterhead.  I am actually surprised that the builder is letting you do this.  Most of the time when you are representing yourself, they do not.

Good Investing.

We've lived in our home for 22 years and we've built a ton of equity. We do use a HELOC to fund flip projects. I wouldn't use it for a long-term hold property, but to do a flip might work. That being said, it is a risk. We made the majority of the mistakes in our first 10 deals. After that, it became like a machine and risk really dropped. If you're on your first deal, trust me, you're in for a lot of surprises. Give it a lot of thought before you risk it all on the real estate roullette wheel if you don't have a partner that is involved with a great track record.

@Stephanie Joe why does your DTI matter that much? Take the loan for property #2. Then, refi cashout of property #1. Even if that negatively impacts your DTI, who cares?

You'll have funds for your first BRRRR project and you'll be off and running.

If DTI is ever an issue you can look towards commercial (investor) loans. Reach out to private lenders for fix and flip or DSCR loans.