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Re-fi of rental property effect on mortgage for primary residence

Hi all,

I have a property that has been rented for about 15 months. If I re-fi the mortgages (1st and 2nd) on this property to reduce the payment will that have an impact on my ability to get a new mortgage for a primary residence with a lower down payment % next year?

Thanks in advance
  • October 09 2011 - San Diego
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Answers (3)

Yes, it will improve your ability next year.

Happy funding, Rudi
  • October 10 2011
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Sadim~

Hi there! With interest rates at a 60 year low, it is definitely a great time to speak to a mortgage professional about your real estate goals. If you are able to re-fi, this could be an increbile oppty to lower your payment depending on what your current rate is.Greg is right, doing so would lower your debt to income ratio. Since you are thinking of buying within a year, keep that in mind and try to avoid any large purchases that involve financing as your score will drop initally, hurting your chance of getting the best loan product. Good Luck let us know if we answered your questions or need any great San Diego loan officer contacts.
  • October 09 2011
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sadim,

I'm not sure what the question is. If you refinance to reduce the payment on any other loan, property-related or not, it should help you in qualifying for any other loan as your debt ratio will be lower. The occupancy type of the either loan is meaningless when you look at it.

Specifically it may help you qualify for a new mortgage to buy a primary residence goes, depending on how much your monthly payment is dropping, but it will not have much, if any, of an effect on the percentage of your down payment when you do.

Hope this helps. Let me know if you would like any clarification or have any other questions...

Sincerely,
Greg

  • October 09 2011
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