Hello everyone we are new to this site and need some help.
ARM just kicked in and my intro rate of 5.2% is over.
We own a Duplex in Oakland ca. We live in one unit and rent the other. We want to Move out to my next investment property. I and my wife can afford about a $3,500 mortgage, if we move out. We want to fix up and live in our next property.
Here are some facts:
Total rents (when we move out) would be $2,500.
My monthly tax and insurance payments are $300.
We owe 300K and my interest rate is 7.35% as of today.
Property appraised at 535K
Need 25K for repairs on roof, landscape and our unit.
I have a dilemma.
Should we Refinance only 300K + 25K for repairs only and keep the slightly positive cash flow? What type of loan should we get? We had originally thought of an interest only loan for 5-10yrs.
OR
Should I max out my LTV and pull out a loan of 429K and pocket about 113K (after paying off credit cards). Interest only 10yr loan, 30yr total.
Use that:
$113,000 cash out
25,000 repairs
- 60,000 10%down payment on next investment
28,000K left for fixing up next investment
This would cause a $550 negative cash flow! So the difference between these two scenarios is $550 a month for 10 years. at least until the new payments take effect.
Need help from experienced people. I do not want to dig myself into the ground. Please any ideas would definitely go into consideration. If you need any more info just ask.
Thank you very much.
Paul & Erika