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Answers (9)
Best Answer
- Rob Stewart, "Rob Stewart LC"
- Contributions:168
If you can really get a rate that low on your rental, i would do that. Not having a payment on your primary residence will reduce your stress in a way that can't be quantified by money. Do a 15 year not, but throw every spare dollar you have at paying off the rental, and try to pay it off in 5 years. If you can get this done, you are well on your way to building a much more stable retirement. Paid-for Real Estate is still one of the best financial investments out there.
- Russell Smith, "RussellMortgage"
- Contributions:109
I agree a lot with Eric Pearson's comments. One plus of refinancing is your payment will go down compared to your current amount which may be helpful for you while getting used to the lower income. You can use your rental income of course to pay the loan no matter which property it is on. Be careful of paying a lot extra in this transition so you can hopefully as I would think budgeting where you can have a life is better than paying extra on a mortgage. Once you are able to pay extra (after building your cash reserves), then pay extra on your mortgage if you are able to. I hope things work out for you.
- wayne lancaster, "funds2"
- Contributions:1177
It seems to me that you need to determine what your worse case income is likely to be in the next few years on a monthly basis and subtract your current debt monthly debt. One option then might be to take a home equity line of credit loan on the rental property and draw monies when your monthly expenses exceed your income. This will give you peace of mind and still not add a $50K mortgage debt. You could also obviously lower your monthly housing payment by $700+ monthly if you refinanced your current loan to a 15 yr loan but would add 10 yrs more debt. Review your options and discuss them with a local credit union or bank.
- Natalie Arndt, "Natalie Arndt"
- Contributions:13
You could also sell your home and move into a rental.
- Tyler Simmons, "Tyler Simmons"
- Contributions:23
You have a couple options, I am from Indiana so things might be different from your state. The 2 options that first come to mind are
1. Refinance your home-This will help your payment drop and your interest rate will probably be significantly lower.
if that is not an option,
2. Take out a home equity loan on the rental home for the amount you need, because a lot of banks will let you take out more than once up to the amount you need.
Hopefully this helps you out. If not, I would consult a financial advisor or consultant to help you with the best situation that conforms with your state's regulations.
1. Refinance your home-This will help your payment drop and your interest rate will probably be significantly lower.
if that is not an option,
2. Take out a home equity loan on the rental home for the amount you need, because a lot of banks will let you take out more than once up to the amount you need.
Hopefully this helps you out. If not, I would consult a financial advisor or consultant to help you with the best situation that conforms with your state's regulations.
- BryceFTW
- Contributions:2
I'm not exactly sure on the rate it would be to barrow money against my rental house, but my primary home's rate is around 5%. I have 5 years left on this loan too.. I just don't know if I have 5 years left of payments left in me if the housing market doesn't do a 180.
Based on the things I've looked at, the best rates I've seen for borrowing money against my rental would be around 3-4%....
Hope this helps Rob.
Thanks a lot!
Based on the things I've looked at, the best rates I've seen for borrowing money against my rental would be around 3-4%....
Hope this helps Rob.
Thanks a lot!
- Rob Stewart, "Rob Stewart LC"
- Contributions:168
If you feel like you are at risk for default because of your reduced income and that high of a payment, it may be better to have that risk tied to a rental instead of your primary house. It's not fun getting behind in payments on the home you live in.
A few things to consider first though...
1.what is the rate on your current mortgage vs the rate on a new investment property refi?
2. how long do you have left on your primary mortgage? what would the term on the refi be?
I think it probably makes sense. it reduces your risk of missing a payment by lowering your payment, it also transfers that risk to a less-important property. It give you the freedom to pay less per month if needed, and if you can still pay the 1200/ mo on the new loan, you would pay it off very quickly.
A few things to consider first though...
1.what is the rate on your current mortgage vs the rate on a new investment property refi?
2. how long do you have left on your primary mortgage? what would the term on the refi be?
I think it probably makes sense. it reduces your risk of missing a payment by lowering your payment, it also transfers that risk to a less-important property. It give you the freedom to pay less per month if needed, and if you can still pay the 1200/ mo on the new loan, you would pay it off very quickly.
- Nicholas Ribeiro, "NicholasRibeiro"
- Contributions:1807
You did an awesome job paying off the rental! Do not take a loan out on it, its like starting all over again! Debt free is the way to be!
- Erik Pearson, "SpringHillHomes"
- Contributions:36
I'm not an accountant so I can't speak to the tax consequences of this, but unless I'm misunderstanding, I don't believe what you're saying makes sense to do. You would only be taking out a new loan to pay off a current loan, and loans on your primary residence always have better rates than investment property. If you're trying to get a lower rate, it would be better to refi your current home. Finally, you can just use the rental income toward your own house; there's no reason that income has to go toward paying off a loan on that house.
I need some advice on this please!
I have been looking into refinancing my rental house to pay off my primary home and letting my tenants pay that house payment... The stress of making my primary house payment is killing me.
My real question is, does this make sense to do? Are there any tax repercussions in doing something like this? I owe around 49k on my home, so if I took a 50k loan out on my rental I could be rid of my house payment.
Thanks for taking a look, I appreciate any advice I can get.
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