Profile picture for user9717599

Im thinking about refinancing mortgage from a fha 30 yr loan to a 5 yr adjustable rate and selling.

Bought the house in 2010 I currently have an fha 30yr  loan at 4.75% and was thinking of refinancing to a 5 yr adjustable and selling the house after the five years. my current principal and interest is $1600, total monthly of $2350 with taxes and pmi. My house is a duplex i live in one unit an rent the other at $1150 a month. I want to sell because i dont like living in this city anymore. Or can i refinance and move out and rent my unit? can you give me some options please.
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December 10 2012 - US
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Profile picture for wetdawgs
If you are planning as soon as you've refinanced, you'll have to refinance as investment property (at a higher interest rate).
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December 10 2012
Profile picture for SoCal Engr
If you want to consider refinancing and then renting both units, you need to consider cash flow. I did a quick-and-dirty thumbnail, and (assuming you could refi into a 30yr @ 3.5%) you're only looking at +$150'ish - and that's with both units rented and no expenses (i.e., repairs, management fees, etc.). That's a thin margin and could be an issue on your DTI calculations for another purchase.

If you look at the 5/1 ARM, then it's almost a "why bother?". Unless you're expecting the price to increase significantly over the next few years, it's a risk with low payback.
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December 10 2012
You can refinance. Once you convert to a rental you should inform your bank. Some lenders may require you to sign a document stating you will reside in the home for 12 months after closing.
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December 10 2012
 
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