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Profile picture for glen_shaw

Can I refi w/cash out to pay down principal on a vacation home?

We have a home mortgage at 6.5% and a vacation home mortgage at 6.625%.  Current home mortgage is for 30% of home value. Home is holding value (western PA), about 540K.  I want to refi home to 60% of home value and apply balance to pay down principal on the vacation home.  How would lenders view this plan?

  • May 04 2009 - Glenshaw
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Answers (6)

As long as your credit score(s) and income are good, you shouldn't have an adjustment for cash out at 60% or less of home value so it looks like a good plan.

The interest rate on your second home is pretty high too so you might want to look into refinancing that also.

Best wishes.
  • May 26 2009
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Profile picture for Mark Juzwa
Yes, you would be able to do this as long as your credit scores are good and your debt to income ratio is below 45%.  Depending on what your ultimate goal is it might be in your best interest to just refinance both.  Because if you do a cash out refinancing on your current home there will be pricing adjustment to the rate.  However, if you are still under 60% loan to value then that would not make a difference and you would be able to get a very good rate and it should not be hit with the pricing adjustment for the cash out.

Hope that helps!!  Good Luck.
  • May 07 2009
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Profile picture for edmundchoi
Provided that your credit score and documentation are optimal, this scenario should not be a problem.
  • May 06 2009
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The short answer...........It would be viewed favorably by any lender.
  • May 05 2009
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Due to the amount of equity that you have in your primary residence, taking cash out should not present a problem.  Reducing debt is an acceptable reason to do a cash out refinance.

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  • May 04 2009
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  • May 04 2009
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