Questions for those with rental properties

[Frank]

I am thinking over again if I were to rent out my current property. With interest rates around 4% I am sitting at 5.5%, wouldn't it make sense for me to refi even if I am just going to move and rent it out? I should realize the savings after about 2 years I would think if I am rolling the closing costs into the loan.

Since my homestead would be moving, wouldn't I be paying higher taxes on the property?

Another thing is, we are looking into having a house built on some land we already paid for. Do you foresee any problems going through refinancing my current property while also trying to apply for the new home? Just wondering how banks look at it when you have two things like that going on at the same time.

[94form2000z]

I am thinking over again if I were to rent out my current property. With interest rates around 4% I am sitting at 5.5%, wouldn't it make sense for me to refi even if I am just going to move and rent it out? I should realize the savings after about 2 years I would think if I am rolling the closing costs into the loan.

Since my homestead would be moving, wouldn't I be paying higher taxes on the property?

Another thing is, we are looking into having a house built on some land we already paid for. Do you foresee any problems going through refinancing my current property while also trying to apply for the new home? Just wondering how banks look at it when you have two things like that going on at the same time.

I personally would look into it, but I do not know the answer to the last question. Not sure how the recent financing would affect score. To me though if the payment is lowered then it should be beneficial to you.

I think I might do the same on mine now that you mention it.

[silversleeper]

They will look at your DTI... I just refinanced our loan and we have 2 houses... They "roll" the amounts together and escrowed for the primary residence... So I have one mortgage payment on both houses now... I'm sure the same will apply in your case... I had to show proof of having it rented for 6 consecutive months though...

[94form2000z]

They "roll" the amounts together and escrowed for the primary residence... So I have one mortgage payment on both houses now... I'm sure the same will apply in your case...

Oh that would suck. I would not do that myself.

[Frank]

They will look at your DTI... I just refinanced our loan and we have 2 houses... They "roll" the amounts together and escrowed for the primary residence... So I have one mortgage payment on both houses now... I'm sure the same will apply in your case... I had to show proof of having it rented for 6 consecutive months though...

We are awaiting to see where we qualify to see what we can build. We aren't totally decided we will build right now, but if we do, it would begin in the next month or so. In 60 days we would be in the house. Then there is the whole matter of not being able to empty our current house until we could move into the new one. In the mean time I am finishing up some projects I had with the current house. I never even thought about them rolling into one.

[silversleeper]

We are awaiting to see where we qualify to see what we can build. We aren't totally decided we will build right now, but if we do, it would begin in the next month or so. In 60 days we would be in the house. Then there is the whole matter of not being able to empty our current house until we could move into the new one. In the mean time I am finishing up some projects I had with the current house. I never even thought about them rolling into one.

I've bought both of our houses for well under market and have quite a bit of equity... My rent house is on the market and having them rolled together gives me more wiggle room on the sale... It was scary at first but once it was lauds out for me it's pretty simple... Both houses are on a 15yr payoff...

[STANGGT40]

I am thinking over again if I were to rent out my current property. With interest rates around 4% I am sitting at 5.5%, wouldn't it make sense for me to refi even if I am just going to move and rent it out? I should realize the savings after about 2 years I would think if I am rolling the closing costs into the loan.

Since my homestead would be moving, wouldn't I be paying higher taxes on the property?

Another thing is, we are looking into having a house built on some land we already paid for. Do you foresee any problems going through refinancing my current property while also trying to apply for the new home? Just wondering how banks look at it when you have two things like that going on at the same time.

when you rent it out, you will move your homestead exemption to the residence that you live in, so you'll pay a little higher tax payment. it's not huge.

the rest of the questions are for someone in loans/refis, not really for those owning rentals.

[SVT Lurch]

the rest of the questions are for someone in loans/refis, not really for those owning rentals.

If you currently live in the house you can refinance it at the lower rates for a primary home. It will be verified multiple ways that you live in the property, it's not like the "good ol' days" when you could just say you did for a better rate. Not accusing you of trying to commit fraud, just letting you know what's coming.

STANGGT40 is right that your homestead will move with you, and I think it's a 25% or 30% discount for a homestead so it's not a huge jump when you do move.

When it comes time to build the new house the biggest issue will be qualifying with both payments. To use the rental income you will need a two year history on your tax returns so if this is the first time you're renting a house you will likely have to qualify with the entire payment. Overall a new inquiry will lower your score slightly, but the monthly savings should more than make up for it (unless you're borderline). Id would ask whoever you plan to use for your new loan.

Which builder says they can have you in a house in 30-60 days? Most I see are 90+.